A binary option is a financial product where the buyer receives a payout or loses his investment, based on if the option expires in the money.
Are they legal?
A lot of people are sceptical of trading binary options because it is done online; people tend to always be more sceptical when it comes to something that deals with money. But everyone can be assured that it is regulated in most cases.
The question to ask is who is the regulatory body, is it the CySEC, the CFTC or ASIC. Is the binary website operating as an online broker or is it an actual exchange like Nadex? Still, some people are not convinced of its legality and others have accused it of being like mobile casino gambling because of the short time frames that binary options are sometimes traded on.
The popularity of trading
Binary options trading has opened up the option to trade for many investors who saw other forms of market investment as being too hard and too complicated to understand and trade. Binary options trading are certainly much simpler to understand and place trades than other types of market trading.
If binary options sound like a fantastic way to win big on the Forex market, being easy, accessible, and diverse, then why was 2016 its worst year ever? The future of binary options trading may become less certain. Many changes are expected to happen in 2017. Some traders even wonder if binary options will “survive” this shift.
How they work
Customers (gamblers) make an “investment” (bet) based on a casino review that a given financial indicator, like the price of gold, will be either above or below a certain amount after a fixed amount of time. These deadlines can be as little as 60 seconds later in some cases.
If the customer is correct, they receive their initial investment back plus an additional 60% – 80% of that investment, but if they are incorrect they lose it all. The massive built-in house edge means users would need to be correct at least 55% of the time on systems that are incredibly difficult to predict.
Why it seems to be the end
The reason for the 2016 crisis on the binary options trading market is that CySEC (the Cyprus Securities and Exchange Commission) had left way too many loopholes with its lax regulations. The result is that many brokerages had refused to pay deposits and winnings to its clients. With Cypriot watchdog tightening the rules, and CySEC following suit, many brokerages have seen a loss of traction. This resulted in clients closing accounts. On top of all that, the European Securities Markets Authority (ESMA) would put additional pressure on Cyprus watchdog.
As CySEC would fail to regulate the binary options market for many years, currently, the over-regulation process may change the binary options trading irreversibly. The possibilities are that either binary option will survive the “onslaught” of tighter rules, or it may transform into a better regulated, updated trading instrument from 2017 onwards.
When it comes to binary options firms it is common knowledge, thanks to multiple former industry workers that the system is gamed against the customers, and still, no action is taken to stop them from brazen theft.
Perhaps the worst part of this system and something truly alarming is how binary options are presented to unsuspecting marks. Because this industry lives and operates from the shadows, the general public knows little about it, and as a result option, brokers can falsely present themselves and their business as a legitimate, low-risk investment enterprise instead of a high-risk proposition bordering on a straight-up con where one side is set up to fail.
While it is encouraging to know some nations have laws against targeting their citizens with this corruption and a willingness to prosecute these firms, it is disheartening that these systems still exist in any form that allows them to target the citizens of any country at all.
The overwhelming evidence available leaves only one conclusion when it comes to binary options trading: it is a massively corrupt industry designed to separate innocent people from their money while remaining couched in a fraudulent veil of legitimacy bestowed by the involvement of flimsy regulatory bodies.
Binary options are rigged, a system that only works because customers are set up to fail to such a degree that succeeding is at times impossible. Players can win casino bonuses when gambling, but they’re guaranteed to lose with binary options. So while trusting binary options firms and the binary trading industry are major gambles, they aren’t gambling.
It seems that innovation and transformation can be the key. Some innovative companies have seen where this is going and are now focusing their attention on exchanges and gaming.
SummaryName: Ending of binary options: Truth or a myth
Author: Stanley Roberts
Published Date: 23/09/2019