1) "Regarding conflict of interest: Banc de Binary is only an exchange between the traders and their 3rd party market maker."
Let me check wheer does it say in it's paperwork?
Even if it is true the you don;t know how good the external third party is? they can default
Now comapre to an exchnage like CME, NYSE, ASX, NSE etc they make sure that all players ( be an individual or a Market maker player) has teh Margin money up front and also THE EXCHANEG DOES NOT NOVATES EACH TRADE
Other thing is in low ilquidity they either have to not offer teh product if they can't match tardes internally or take the Risk tthemselves.. TRUE exchanges won't take any risks
And that means never conflict of interest with a True exchaange
BO followers miss this point
2) "I used these 3 as examples because they are some of the few applying for license in Cyprus.
SO they are not yet liecnesed ! LOL mate why would you trade with them when they don;t even have CySEC cover!
3)"There could be fraud going on anywhere. That's why I mentioned MF Global."
Some part of MFG might be covered by SIPC
But SIPC atlkeast gives covers as follows
What SIPC Covers - Investor Protection
{What SIPC Covers... What it Does Not The cash and securities – such as stocks and bonds – held by a customer at a financially troubled brokerage firm are protected by SIPC.
Among the investments that are ineligible for SIPC protection are commodity futures contracts }
Once again mate I am not talking about futures brokers ... I am talking about Option brokers who are covered under SIPC insurance.... Futures brokers are not neither are FX
SO apples to apples
BO from Cyprus brokers goes bely up your money is gone
BO made up of Exchange Traded Option, brokers goes bely up your money is protected by SIPC in USA
Tell me what cover at all Cyprus provides?
3) "As far as capitalization goes, I'm almost positive it is a fixed $1,000,000."
SO not sure there and even if you are correct that is 20 times less than what US regulations require
4) "Exchange Traded Option Spreads? I haven't looked into it"
It is very simple you are just combining 2 o[ptions to give you a limited risk / reward outcome
you can look in broker like IB, OPtion KING, Options Express, Think or Swim
Lets take a Index option (Cash settled)
DJX 134.13,
You think DJX is going to settle down
Buy DJX JAN 13 135 strike CALL / Sell DJX JAN 13 136 CALL
If DJX settles beyond 136 your payout = 100 so profit =100-37 = 63
Max loss = $37
And you can do this on hundreds of stocks/ Index etc
these are simple vanila options
The positive I can think of about the BOs you mention is short expiary and easier platform nothing else is positive
Just to go on this bandwagon of Oh big brother Govvt is bad so lets have the dodgy brokers and let them scre the not so prudent investoprs is a callus attitude by these vested interest ( I am not implying that you are one of them)
And hence everytime a pointed question is asked they just go on tangent
Moka
With that in mind if you are equating "more effective regulation" and "Protect US unsuspecting investors" with the CFTC then you are mistaken. I did make a post in the davefielder thread about the CFTC but I'll repeat it here: The CFTC is not concerned with protecting retail investors or traders no matter how they spin it. Their priority is protecting their member firms (US futures broker/dealers). They are doing this by limiting money moving out of the country and overregulating the spot forex market to the extent that many firms have left. The result is money shifting back to the CFTC member firms. To be fair the CFTC has cleaned up the forex market here a lot but IMO they went to far with regulations.