Binary Options

How binary options work？

　　A high-risk, unpredictability investment that is nothing more than a bet

　　Binary options guarantee high rewards in a short period. However, in the majority of cases, you will lose your entire investment.

　　Binary options are financial products on which the result of an event is wagered. If you make the correct choice, you will receive a predetermined monetary prize. If you make a mistake, you will lose your entire investment.

　　According to an ASIC investigation, over 80% of retail clients lost money when trading binary options.

What are binary options？

　　Binary options are also referred to as “all-or-nothing options,” “fixed return options,” or “digital options.” They allow you to wager on stock prices, currency fluctuations, markets, or economic events. For example, you may wager on whether a company's stock price will be higher in one hour than it is now.

　　Binary options contracts are typically relatively short. They range in time from a few minutes or hours to a few months.

　　Trading binary options may appear to be simple. However, even for pros, predicting the short-term changes of an underlying asset is extremely difficult. They are high-risk and speculative. When you trade binary options, you are betting on the price movement of an asset.

Binary Options Risks

　　If you pick the right price movement, binary options can provide you with quick and substantial rewards. The reality is that if the price does not move in the direction you specified, you will lose your entire investment.

According to an ASIC investigation, up to 80% of binary options, investors lost money.

　　ASIC also discovered that binary options are likely to cause cumulative losses to retail clients over time due to the following product characteristics:

• 　　the 'all or nothing' payoff structure, where one of the two possible outcomes for a binary option contract is that the retail client loses their entire investment

• 　　short contract duration (the average contract duration of binary options trading with one provider was less than six minutes)

• 　　negative expected returns (that is, the present value of the expected payoff for a binary option contract is lower than the initial amount invested).

Consumer protections are no longer available to wholesale clients.

　　Some businesses may attempt to classify you as a “wholesale client” rather than a “retail client.” They may ask you to join up for a “pro-account” and explain the benefits to you. However, if you are a wholesale customer, you must:

• 　　If you waive your right to use the binary options provider's internal dispute resolution service,

• 　　you will not be able to use the Australian Financial Complaints Authority (AFCA) for external dispute resolution,

• 　　and you may not receive a Product Disclosure Statement or Financial Services Guide for the binary option.

Scam involving binary options

　　Binary options are used by some crooks to take your money. Be extremely cautious if you receive a phone call or see an advertisement for binary options trading on the internet or social media.

　　If you invest through an unlicensed offshore company and something goes wrong, you will be unable to obtain assistance.