The Legality of Binary Options In Canada

Canadians wishing to get involved are wondering are binary options legal in Canada, and if so, if there are any particular terms of which they should be aware.

There are many sets of rules at play here.  The broker’s own legal jurisdiction have one set of laws, their regulatory overseers have another, and finally the jurisdiction where the trader lives has yet another!  This is bound to cause confusion and dispute.

In short, binary options brokers in Canada exist in a legal “grey area”.  This exists because some countries license the practice as legal and legitimate, while Canada has not specifically addressed binary options in its laws.  We expect Canada might address it shortly, but has not at this time.

Some countries have regulated binary options trading specifically.  The USA, Cyprus, Japan, South Africa, all have some form of regulatory oversight for binary options.  At this time, we are unaware of Canadian law specifically addressing binary options.

Sometimes a broker will license themselves as financial binary options, and sometimes the company will license as internet gambling.  Some governments consider binary options a prediction or gambling market rather than trading real securities.   Some consider them securities.   The brokers who service Canadians from abroad often have supporting legal opinions to justify their business operations trading with Canadians from their legal jurisdictions.

Right now there are no binary options brokers doing business from within Canada selling to Canadians, and no broker is regulated by Canada itself.  If a broker tells you they’re trading out of Canada you should avoid them at all costs as they are lying to you and likely scamming.  Since Canadian regulators can’t help you retrieve money within an industry they do not control, it’s very important to choose wisely in which broker you deal with if you’re going to trade outside of your regulated area.

Today some jurisdictions consider binary options trading to be a form of gambling, and have licensed it as such.  Both Isle of Man and Malta have licensed binary options brokers as a gambling product.  Given that those two jurisdictions issue highly respected gambling licenses, this should bring confidence to someone wanting to trade binary options that their money is safe with a reputable company.


Classified as exotic options, binary options are easily accessible and allow even the newest of traders to get involved in this type of financial investment. Binary options have grown exponentially across the globe over the course of the past decade. Although not a new concept, binary options have recently made tremendous gains in popularity due to the increased visibility of the market. Canada is no exception; with many reputable online brokers, it is no surprise that Canadians have started paying attention. As more brokers tailor their advertisements and promotions to Canadians, more people want to be part of the binary options market.

What Canada currently has is a Canadian Securities Administrators (CSA) agency, which was formed by securities regulators of all ten provinces and three territories. The CSA is an umbrella organization whose objective is to try to streamline the diverse capital markets in operation across the country. With that said, the organization apparently has no actual plan in place to begin the study of regulating the binary options market in Canada.


Since binary options trades happen from within the comforts of the traders’ homes, it is easy to access a range of brokers that have approval in various foreign jurisdictions such as the United States and the European Union.

When researching a broker, traders should ensure that it is trustworthy, reputable, and applies fair trading practices. It is best to choose a licensed broker since who provides confirmation that it operates within specific and strict legal stipulations. Unlicensed brokers could potentially put traders at risk of fraudulent activity. That’s where we come in, with our list of recommended binary options brokers for Canadians.

Since binary options have caught Canadians’ attention within the last few years, we may see the creation of laws in the future addressing the industry. For now, Canadians looking to trade binary options are limited to international brokers whose online reputation is solid and offer a variety of options and promotions to citizens of Canada.

See our list of recommended brokers for Canadian citizens on our binary options brokers page.


Because different provinces have their own financial regulations, we explore the question of binary options legality on a province by province basis.