Are Binary Options Legal in Australia or not?
Binary Options Australia is the term used for financial products that bet upon the possible outcome of any event. In case you pick the outcome correctly, then you will receive a cash pay-out. But, if you get the outcome wrong, then you will be losing the entire investment.
The ASIC (Australian Securities and Investments Commission) did a survey or review around all of Australia and said that around 80% of all retail clients tend to lose their money on the binary options. From the 3rd of May, 2021, all the binary options providers in Australia and binary options hack automator apple the trading apps and platforms are banned from selling binary options to retail clients.
The binary options are not just banned in Australia but also in the financial markets of many overseas countries and regions. But, binary options daily 180 wins video before getting banned, there was a lot of potential and conspiracy around the Binary Options. Therefore, it is important for you to get an idea of Binary Options Australia . Keep reading to know the details.
What you will read in this Post.
The Legality of the Binary Options.
Binary Options are considerably the ‘all or nothing” options, ‘digital options,’ or ‘fixed return options.’ This allows you to make some bets over the share prices and foreign exchange movements. Not just that, but you can also bet upon the economic events and the markets. For instance, with Binary Options, you get the ease to bet upon the share price of any particular company to predict whether the current price of the share will rise or fall.
The contract period for the Binary Options is quite short. In fact, the contract time ranges between few minutes, few hours, or up to a few months, in the future. In association with the Binary Options, the trading aspects might seem simple, but picking up the short-term movements of any asset is quite tricky. Even the professionals find it a bit complex to invest in!
Trading with Binary Options brings in significant risk factors, as you are gambling upon the price movement of an asset. With substantial risks, the rewards are also profitable! Therefore, before the ban was imposed on Binary Options, they were preferable amidst a big mass of people. Some people won a fortune, while some lost everything they had! It is all about how you study the market, the assets, and their price movements.
To know more about the ban and the reasons behind it, you can check out this news article!
As a matter of fact, the Binary Options Australia trading has some regulations as per ASIC!
Risks Associated with Binary Options.
The ban was imposed upon Binary Options in Australia for its risk properties. Even though this helps people earn a good fortune, the devastating part of Binary Options could not be ignored.
Binary Options Australia promises to give out quick and proficient returns. But the condition is that you should pick the proper movement of price. But the risk is high as well! If the asset price doesn’t move in the direction, as per your prediction, you will be losing the entire money you invested.
As per ASIC, Binary Options result in projecting cumulative losses to the clients. It is mostly because of the characteristics that Binary Options possesses, which includes:
The pay-off structure is not efficient for the clients to actively invest in it. It is because “all-or-nothing” brings up only two options for the clients. Either they lose all the money, or they win a fortune! But taking that considerable risk of losing all the investment is the characteristic that makes it a risky bet. Shorter contract duration is also a crucial characteristic that makes it a risky bet. It is because if you have bet for the asset price to go up, but it goes down for your contract duration, and then it immediately goes up right after your contract is over, then you might lose a lot of money in a short span, that could have been saved if the agreement was a bit longer. Negative Expected Returns means that, at times, the present value of the pay-off that you expect from the Binary Options contracts will be lower than that of the initial amount you invested. Hence, there is a risk that you might still incur a loss, even after winning the bet!
Not just these characteristics, but there are many other direct risks in association with Binary Options. One among which is that wholesale clients are losing consumer protections. Some of the firms will set a bar to classify your designation as a wholesale client instead of a retail client. If you are a wholesale client, you won’t be getting the right to access the internal dispute resolution service, which the binary options provider offers.
Also, the wholesale clients will not have access to external dispute resolution. They will also be deprived of the Product Disclosure Statement for Binary Options. Keeping everything aside, the scammers trying to steal your money is the last and most crucial risk factor.
The scammers might prefer using Binary Options for stealing all your money. If you get any kind of phone call or an ad that talks about giving you the chance to trade with binary options, don’t click on it or attend it. They might steal all your money without any evident outcome. Moreover, if you are investing in any overseas company that doesn’t hold a license, you cannot seek help officially if anything goes wrong.
If you intend to know more about investment scams and learn about how to avoid such scams, then give this article a read.
Top Sites That Supported Trading of Binary Options.
The trading of Binary Options was possible only with ideal platforms to invest in. And here are some of the top sites or platforms that got the liberty to allow individuals to invest in them for trading binary options. The sites or platforms include:
#1 Pocket Option.
It has over 130 assets to trade upon and offers instant access to the social trading aspects. In fact, this platform organized tournaments with a price of around $50,000 for the individuals who bet upon Binary Options. There is a single-account opening option for every client. This platform is well-suitable for newbie, beginner, master, and experienced traders. The ease of use is what makes it the best of all!
#2 Quotex.io.
Quotex.io selects the assets that are interesting and demanding for the individuals. It has a bespoke platform for both PC as well as mobile. The minimum deposit for the users to start their trading over Quotex.io is $5/trade. Also, the platform helps in setting the trade volume and the time of closing the trade. In addition to that, this platform also offers deposit and welcome bonuses with a commendable support system.
#3 IQ Option.
IQ Option allows you to trade with over 300 assets and has ideal account options for almost all types of traders. You can trade over this platform with a minimum deposit of $10 and a minimum investment of $1. The best thing about this platform is that it supports convenient withdrawals and offers 24/7 support.
These were the common platforms that were useful for trading Binary Options before it got regulations in Australia. Now, the legality of trading on Binary Options has not been retrieved, but there is a demand for a license to trade! In fact, these platforms are now not liable to help people trade with Binary Options.
ASIC Rules for People & Company to Trade with Binary Options.
All of the financial markets in Australia are now under regulation by ASIC. It states that all the financial services providing companies in Australia must have the AFSL (Australian Financial Services License) for being able to offer specific investment products to the public. The binary brokers are also liable to follow this rule!
ASIC also demands that any binary broker from offshore regions wishing to trade with Australian citizens should possess the AFSL License. They should also open up an office in Australia for the purpose. The ASIC, with this initiative, wants to ensure that any broker who is willing to do some kind of business with Australian citizens should operate or follow the same conditions, just like the existing companies of Australia.
ASIC wants to take more control over the financial markets and the way it is being leveraged. Also, ASIC is under an agreement with FFAJ, CySEC. These departments are the regulators of Binary Options in Japan and Cyprus, respectively. It is to ensure regulation on the brokers within the jurisdictions, from posting ads of their products to the Australian traders. Instead, they can comply directly with all the directives that are issued above.
Therefore, today, many brokers possess multiple licenses to reflect the regulations that stop them from cross-advertising their selected binary products.
Conclusion.
So, with all of the insight, you can conclude that Binary Options are not entirely illegal in Australia after the ban. But, the regulations imposed will prohibit most of the retail clients from leveraging Binary Options. It is to help the citizens stay safe from bearing heavy losses!