What is in store for binary options
A recent investigation by The Independent uncovered a financial scam that was placing thousands of people at risk. An increasing number of binary trading options have proved to be fraudulent, and in the UK they fall what is in store for binary options the control of financial regulators. ASIC said that it has looked at a large number of apps offering binary options trading and found hundreds were not properly licensed.
While many binary trading platforms are legitimate -- giving people the get-rich-quick option of "betting" on whether a given currency or share price will increase or decrease -- the lack of regulation means it can be almost impossible for people to get their money back if anything should go wrong. This is particularly true for schemes operating from different countries. The investigation by The Independent makes reference to platforms including BinaryUno and Tradorax which were impossible to contact in the event of a problem or complaint.
What is in store for binary options a follow-up story, the newspaper reports that Apple and Google have removed hundreds of binary trading apps from stores in Australia, but BinaryUno and Tradorax are still accessible in the UK and other countries. ASIC issued a statement today:. We were encouraged with the speed both entities removed the relevant apps identified by ASIC from their respective app stores. We also note that Apple recently changed its review guidelines to state that apps that facilitate binary options trading will not be permitted in its app store.
ASIC would also like to remind investors that binary option providers are in control of the pricing for their product and, on reviewing some of the comments that appeared with the apps, it seemed that some investors made money in the demo mode but lost money once they moved to a live trading system.
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Are there signs however, that some of those barriers are soon to be removed? I want to explain what is holding binaries back right now — and what might develop during to help move these simple tools, from relative financial obscurity, into the mainstream. Binary options have a poor reputation.
The poor reputation has been created by irresponsible marketing and short sighted brokers, looking to take advantage of a new financial innovation — before what is in store for binary options gets fully regulated. This what is in store for binary options not a new phenomenon. New financial products are often seized upon by unscrupulous operators and binary options were no different.
These funnels are a misleading way to market binary options. Some of the activity was bordering on the criminal. We have managed to help some people who have been on the wrong end of this sort of thing — if you have, get in touch. Regulation was another issue. Unregulated firms were free to operate, and those firms that were regulated what is in store for binary options rarely monitored as they should have been.
This area has improved however, in two ways. Firstly, CySec — the regulator covering most firms, began to deliver some serious blows to brokers not adhering to regulations. They are finally making some sensible demands of the firms under their stewardship and are dishing out meaningful punishments where required.
The second improvement comes in the form of better regulation across Europe — other bodies are now stepping up their efforts to get involved. So what is likely to change and how? Both are mainstream CFD brokers, illustrating the slow acceptance of the financial sector that these instruments are genuine, and popular trading products.
Another move forward is in regulation. Again, some brokers now getting involved in binaries, are already regulated by strong European regulators, because they already offer other mainstream products. The more robust regulation brings us on to Brexit. The update was going to include new rules on short term trading, and also include binary options.
Due in earlythe rules were delayed to give firms more time to comply. How does Brexit fit in? At present, they have not shown a great desire to clean up the sector — maybe that will change. This will be another big step towards moving binaries into the financial mainstream. It is worth remembering however, that as I mentioned above — some firms now offering binaries are already regulated by the FCA because of the additional financial products they offer.
More products, better pricing, absolute transparency and a focus on the clients are just some of the improvements. I have seen a demo of these offerings and they are a game changerplain and simple. The model is based on trading volume, not counter-party risk.
That means they want traders trading, and they do not mind if they are profitable — long term. We will of course be listing and reviewing these brands — and the binary options sector will be given a real shake up. Hopefully, a big enough shake to move them out of the shadows, into the light of the financial mainstream.
The future of binary options. Regulators bear what is in store for binary options Regulation was another issue. The future of binary options So what is likely to change and how?