A binary option is a type of a financial option that has a payoff which either leads to a win of a certain amount of money or to nothing at all. There are only two options available, hence the name binary option. Trading in these assets can be risky and oftentimes there are many providers who offer fraudulent products that leave the customers deceived and steal their funds. Continue Reading →
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Seven English Premier League football clubs have entered into a partnership with eToro. The Israeli-based investment firm which has a global appeal and which deals with a variety of assets has agreed to facilitate Bitcoin payments by seven English Premier League clubs to their players. Continue Reading →
The European Securities and Markets Authority is an organization that is tasked with “safeguarding the stability of the European Union’s financial system by enhancing the protection of investors and promoting stable and orderly financial markets.” In order to achieve this, the organization issues a rulebook to be followed by EU financial markets. Furthermore, it coordinates the behavior of regulators across various territories. Continue Reading →
“Binary options allow a consumer to make a bet on the expected value or price of a stock, commodity, currency, index, or just about anything that is capable of being measured in financial terms,” – explains the Financial Conduct Authority. Up until 2018, these products were regulated by the UK Gambling Commission, if the company offering them also offered other forms of gambling. From January 3rd, 2018, all responsibility regarding the binary options will shift to the Financial Conduct Authority. Continue Reading →
The year of 2017 has been quite bad for the whole binary options industry. This has led many brokers to add FX and CFD trading instruments to their offers (like IQ Option) or even completely abandon binaries and offer only currency and CFD trading services (like 24option). The main reason behind such drastic changes is rather simple – European and Israeli regulations.
Most of the binary market was located in the above-mentioned countries. While the story with Israel is quite simple, the country hosted a bunch of unregulated and regulated brokerages, which were then prohibited by the local authorities, the CySEC changes are mostly driven by the European Banking Authority. Long story short, European Union does not want binaries to be offered at all, or at least by the companies that are regulated by the European bodies.
Now it is time to take a look at the possible scenarios of the binary options regulation in the coming year and see if we could still buy our call and put options with trusted companies.
Best examples come from gambling
Unlike financial trading, online gambling has been around for much longer. And most of the updates in the financial regulation (especially in terms of online businesses) have already taken place in iGaming sector previously.
Throughout the history, European gambling regulators were not allowing any online companies to apply for the license. Such a practice received a name of the grey area, a situation where one operates without a license simply because he is unable to apply for one. In late 2016 and early 2017, many European countries (like Poland and the Czech Republic) have allowed gambling companies to file an application for the license, yet the conditions for getting one are so harsh that most of the companies decided to simply abandon these markets. This gave birth to various online bitcoin casinos, companies that can accept the payments anonymously and cannot be blocked by the various credit card processing companies. While many may assume that players would opt in for regulated online casinos, they actually prefer bitcoin casinos for one simple reason – these companies make much better money, hence they can provide much better support services, a wider scope of games or just fatter bonuses.
Hence, one of the obvious conclusions which we can draw here is that some binary options brokers will completely avoid European regulations and will simply switch to accepting only payments in the bitcoin or other cryptocurrencies.
How about actual regulation?
Well, going fully unregulated is certainly an option. Binary brokers like this have been around for years, yet it is quite possible that within 2018 they will be blocked by all of the major payment processing companies. So how one can avoid being blocked by the payment processors and still operate without a European license? The answer is simple – go for the regulation elsewhere.
Even though EU regulation has been quite easy to get for many of the brokers and was also perceived as one of the best for the trader’s perspective, there are still other legitimate countries that can offer a solid regulatory framework. One of such countries is Australia, the license issued by ASIC is actually quite well known by many FX traders and, currently, Australia has not been trying to close its binary brokers. Countries like Australia can certainly be a great option for binary brokers that are looking for regulation outside of EU.
As the binary options industry is sweeping over the world and signing up millions of clients, some regions still remain largely untouched. Norway is one of these few regions, and there are several contributing reasons:
Binary options trading is viewed as gambling by most people. Indeed in some ways it is, but the general structure is quite different, which is why it is often considered to be a financial instrument. Nevertheless, many countries do not recognize it as such, and it remains either unregulated or licensed by non-financial bodies.
In the UK, for example, the Financial Conduct Authority (FCA) does not recognize binary options as a security or financial instrument. Hence, binary options brokers in the UK are governed and licensed by the Gambling Commission. However, the US does recognize binary options as a viable financial instrument, which is why the trade is licensed and overseen by the Commodities Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). The Cyprus Securities and Exchange Commission (CySEC) also acknowledges binary options, and provides licenses to numerous brokers.
Nevertheless, the activity remains unregulated in most areas of the world where there is no law directly concerning binary options, and these include Norway. The Financial Supervisory Authority of Norway (Finanstilsynet) does not have any authority over binary options, thus there’s no regulation over it.
Despite this, according to https://www.norskcasino.review/, Norwegians still practice binary options trading through brokers situated in other European countries, but only to a small extent because of the social attitude regarding gambling. Binary options are also called all-or-nothing options, giving them more of a gambling nature than an investment. In Norway, the people do not like gambling and most Norwegians see it as a social ill. This can be demonstrated by the residents’ reluctance to pressure their government to change the existing laws on gambling. Surveys also show that even though gambling still goes on, Norwegians would prefer if the government imposed tougher laws to limit how much it goes on.
All these show that there is an underlying distaste for gambling, and the association of binary options with gambling transfers the same attitude Norwegians have over gambling. In other parts of Europe, binary options trading has grown because of marketing tactics that glorify binary options trading through images of rich young people who claim to have made their money from the trade. In Norway, though, social good rather than personal riches and wealth are glorified, so this same marketing gimmick has not had an impact.
In short, there are different social attitudes in Norway that have worked together to keep binary options unpopular in Norway.
Norway’s FSA does not recognize or regulate binary options trading. This means that there are no binary options licenced by the financial regulator and all the trading of binary options that still occurs is done through offshore companies. The trading of binary options in Norway is therefore illegal in the eyes of the law.
However, other similar crimes still go on such as the online gambling that is done through offshore gambling companies, because there has never been prosecution for these crimes. In spite of this, the idea that something is illegal is enough to deter most Norwegians from binary options trading. Furthermore, any proceeds from binary options trading are taxable, and at the high rate of 30%, which is more than many other European countries.
These factors on the legal and regulatory side also contribute to the unpopularity of binary options trading in Norway.
Automated trading or in another word Algo-trading is the new trending word among binary options traders. It basically involves the use of algorithm on electronic platforms for entering different trades. This electronic trading platform works by executing pre-programmed sets of executable instructions which may be executed at various times. The fact that it does not involve any human intervention makes it the ideal solution for stressed traders. Automated trading is also being used by mutual funds, pension funds, institutional traders and investment banks. Binary options signal robots are the major tool for managing this kind of trading. Automated trading is also well suited for beginners as it involves very minimal human input. Continue Reading →
Forex trading is a business that involves speculating price direction of the world’s currencies. Is the Euro going to lose value against the US Dollar? Is the Japanese Yen about to springboard into unprecedented levels against the Great British Pound? These are questions that are asked by Forex traders and which they attempt to answer as precisely as possible every day of the week. Continue Reading →
Trading on Forex can be tricky if you are just starting out. I am sure you did your research well and everything, but you might lack the actual practice. Fortunately for you, the majority of brokerage firms offer free demo accounts you can use for perfecting your skills. Of course, you will not be trading with your own actual funds and that is a great thing which will make you a better trader once you start trading with the real money.
Bitcoin gambling has become more and more popular with traders over the past years, with the crypto-currency gaining the interest of the markets thanks to its growth potential, but also, why not, to its high volatility. This makes speculations more and more lucrative for those who understand the system and have enough information to make educated guesses on the bitcoin. Continue Reading →