Why are Binary Options Banned

The terms “simple” and “high returns” are usually music to a trader’s ears in the world of financial trading. While more experienced users will be aware of this, the words could still be compared to dangling a carrot in front of a horse. However, novice traders may be misled by the drawbacks of this initially simple financial trading option. Words like prohibited, dangerous, and illegal come to mind. Today, I’ll try to put your mind at ease about binary options, showing you that with the right approach, you can avoid their ominous connotations.

What are Binary Options 

If you’re in the trading world or thinking about getting into it, you’ve probably heard of binary options trading. While many people understand the fundamentals of binary options, not everyone is aware of them. A binary option is a financial product in which the buyer either receives a reward or loses money depending on whether the prospect has expired. Because it is a simple option contract with a fixed risk and reward, it is often referred to as an all-or-nothing deal.

When you trade binary options, you are betting on whether the value of an item, such as a commodity, stock, or currency, will rise or fall over a specified time period. The trader’s earnings are displayed right away. In other words, when you place your trade, you will know exactly how much profit you will make on your investment if your prediction is correct. If your guess is incorrect, you will lose your entire investment. There is no variability in this type of trading because you can only predict whether an asset’s value will rise or fall, but not by how much.

  • There is a wide range of binary options available for trading across a wide range of industries
  • Binary options can only be traded during normal trading hours 
  • There is no opportunity for leverage

Binary Options Ban

While binary options can be used in theoretical asset pricing, they are prone to fraud in their applications and are thus prohibited as a form of gambling by regulators in many jurisdictions. Many binary option trading platforms have been exposed as fraudulent. The FBI is investigating binary option scams all over the world, and Israeli authorities have linked the industry to criminal syndicates. Retail binary options trading has been prohibited by the European Securities and Markets Authority (ESMA). The Australian Securities and Investments Commission (ASIC) regards binary options as a “high-risk” and “unpredictable” investment option, and the sale of binary options to retail investors will be prohibited in 2021.

The FBI estimates that scammers steal $10 billion per year around the world. The use of famous and respected people’s names, such as Richard Branson’s, to encourage people to buy fake “investments” is common and growing. Articles in The Times of Israel explain the fraud in detail, drawing on the experiences of former insiders such as a job seeker recruited by a bogus binary options broker who was told to “leave [his] conscience at the door.” Following an investigation by The Times of Israel, Israel’s cabinet approved a ban on the sale of binary options in June 2017, and the Knesset approved a law prohibiting the products in October 2017. 

Is Binary Options the same as Gambling?

As suggested by the top rated asset recovery firm, the Global Payback, there are numerous misconceptions about binary options. While it is technically not one of them, the suggestion that it operates strictly in the same manner as gambling is.

In reality, gambling is one of several approaches to binary options trading. A broker may offer up to 150 assets and contracts in order to minimise risks and maximise profits. The goal of all available methods will be the same: predict the future price position and receive a payout if you are correct; lose all of your money if you are incorrect.

Outside of countries where binary trading options are legal, the venture could be used as a form of theoretical asset pricing. Aside from that, it is considered a prohibited practise, similar to gambling. Binary options are typically prohibited by regulatory bodies due to their proclivity to fall into the hands of fraudulent practitioners. There have been far too many outlets exposed as fraudulent to count.

Recovery Companies such as The Global Payback Can Help You Avoid Being Scammed

You could be a victim of fraud anywhere, not just abroad. There is a history of online brokers defrauding customers out of their money. Because it is perceived as straightforward trading, it is simple for fraudsters to take advantage of traders. As a result, before trading with a broker, it’s a good idea to check out their reputation, read reviews, and so on. If one is scammed, the global payback is a well-known fund recovery website that assists investors in recovering their lost funds by collaborating with their team of experts. The Global payback has successfully recovered investors’ funds in a very short period of time. Contact The Global Payback to protect your investments from scammers.