About Binary options

About of Binary options

Is the trade of Binary Options an activity regulated under MiFID (Markets in Financial Instruments Directive)?

The most precise answer is that the legal status of binary trading differs from country to country, but as a general rule, any restrictions on binary options is imposed on the brokers and not the traders. As a client, you are allowed to buy binary options from any country.

Binary Options are typically offered to clients (retail and professional) through a platform where clients can trade binary/digital options in a number of underlying products (e.g. oil, gold, indices, currencies, stocks etc). These binary options are private contracts between the client and the Investment Firm and are settled in cash. Through these binary options, people can speculate on which direction the price of an underlying product will move within a specified time frame. When a binary option is purchased on the Investment Firm’s platform, a contract is created which pays some fixed amount of cash if the option expires in-the-money or nothing if the option expires out-of-the-money.

Binary options only have two possible outcomes once the trading day is over, a trader either gets a return or nothing at all. The simplicity of the binary options market hides the risks involved for traders and investors. One must have the proper prognosis about the market in order to obtain a great performance from the binary options market. One of the risks involved in the binary options market is the lack of tools to make the correct prognosis. Since there are only two possible results, there are a limited number of tools that a trader can use. The result at the end of a trading day will only be a yield or a loss.

As the binary options you are referring has the features of a derivative contract settled in cash, such binary products appear to meet the definition of “financial instruments” laid down in Section C of Annex I to MiFID. Therefore, companies offering investment services and activities in these binary options should be authorised as investment firms under MiFID.

Most of the time binary options are presented as the answer to all of your financial problems. In reality, nothing can be further from the truth.

Scammers are, unfortunately, a fact when we are talking about binary options trading and you have to be very careful when choosing your new broker. A wrong one can cost you a lot of money.

It’s not really a scam, as the majority of companies that offer binary options are legitimate businesses. As legitimate brokers, your money will not be stolen and you won’t be defrauded. The problem is that at this moment the majority of brokers promise unrealistic winning expectations to their traders.

There’s a plethora of variables and risks that you will have to consider in order to accurately predict the future development of an asset.

Issues such as time of the year, state of the economy, recent political developments, economic performance of key market makers, recent business news and events are constantly influencing the movement of stock prices and commodities.

In order to be able to accurately predict he movement of an asset you will have to be up to date with all of these info. Also, in order to be successful, you will have to understand a variety of technical data as well, such as being able to read charts, use technical indicators, understand statistic calculations and much more.

One way to minimize the risk of fraud when trading binary options is to work with brokers that are subject to regulations. The actors in any regulated market are accountable for their conduct while operating their businesses

The problem here is that the binary options trade is still trying to make a name for itself as a serious business and the scammers harmed the industry’s reputation. These people have caused a lot of problems not just for traders, but also for the whole binary options industry as people slowly began to lose trust and professionals had to put in extra effort to prove that this is a legitimate business. The scammers would, and still use, the fact that it is very hard to supervise them as the trades are done online and once you confirm that you agree with their Terms and Conditions it can become very difficult for you to withdraw your money. At that point, you and your money are pretty much at their mercy.

If people want to gamble, that’s their choice. But let’s not confuse that with investing.

Our advice is to check some regulatory institutions, if the country in which the broker is located has this kind of trading under strict control.

Our advice is to only use credit cards and not debit cards because with the credit cards you still have time to act if you have been a victim of a scam, while in the case when debit cards are directly connected to your bank account, it can already be too late for any steps to take and the money will be gone.

The methods used by the scammers are numerous, but can still be noticed pretty easily. Some of them continue to charge the credit card even after your demand to leave the broker, others may manipulate terms and conditions agreement which you are required to accept, but some of them will even manipulate their platforms to provide you with false information and make sure that you end up out of the money. They will all enable you to deposit money to them as simply as possible and you won’t be able to withdraw anything through this process, so be very careful when you are making your deposit.

I will be never tired to repeat that first you have to check some regulatory institutions, if the country in which the broker is located has this kind of trading under strict control.

We have received a number of complaints and warnings about the binary options scam associated with websites that offer an opportunity to buy or trade binary options through Internet-based trading platforms. The complaints fall into at least three categories: refusal to credit customer accounts or reimburse funds to customers; identity theft; and manipulation of software to generate losing trades.

When clients try to withdraw their original deposit or the return they have been promised, the trading platforms allegedly cancel clients’ s withdrawal requests, refuse to credit their accounts, or ignore their telephone calls and emails.

It could happen also a fraud involves identity theft. For example, some complaints allege that certain Internet-based binary options trading platforms may be collecting customer information such as credit card and driver’s license data for unspecified uses. Be careful about requests photocopies of your credit card, driver’s license, or other personal data from a binary options trading platform and do not provide the information they asked for.

Do not invest in something that you do not understand. If you cannot explain the investment opportunity in a few words and in an understandable way, you may need to reconsider the potential investment.

Read also the following article about Forex Broker

Boccadutri has a team of specialist forex scam lawyers whose collective experience covers some of the most ground-breaking and eye-catching cases and our forex lawyers are ideally placed to handle claims arising out of the regulatory investigations in relation to your investment.

If you suffered losses as the result of a binary options investment in which you believe your binary option broker has scammed you, you need the assistance of a forex scam lawyer. Contact us here now for a free no obligation discussion and quote.