Binary Options Banned in Australia Starting May 3

The Australian Securities and Investments Commission, also referred to as ASIC, has prohibited binary options sales to retail customers. This development takes effect from May 3. We want our readers to learn about this important news, especially those from Australia interested in binary options trading or are existing binary options traders. We believe that this event can significantly impact them today and in the long run.

Based on the news posted online by the US stock exchange Nasdaq, the ASIC released an official statement last Thursday, April 1. Australia’s securities regulator affirmed that binary options trading involves a client and an issuer. Under a binary options contract, binary options sale features an all-or-nothing payout. Whether a specified event takes place in a specified time or otherwise determines the agreement. 

Moreover, binary options can consist of a happening related to a market index or financial product’s price movements. According to the ASIC, the group performed their research, and they found out that roughly 80 percent of retail customers lost their funds trading binary options per their reviews in 2017 and 2019.

Additionally, the ASIC revealed that in 2018, they estimated that retail clients suffered net losses totaling A$490 million (or $371.86 million at the time of writing) from binary options trading. The regulator explained that the factors that heightened retail investors’ chances for losses are the anticipated negative returns and binary options trading’s all-or-nothing payoff arrangement.

The ASIC also confirmed that the short contract duration on average is another reason that aggravates traders’ situation. The ASIC’s ban of binary options sale to retail clients will remain in force for one year and six months. After this period, the regulator could reportedly extend the prohibition or make it permanent. 

Cathie Armour said that the ASIC put the order in place with the intent of safeguarding retail investors. As ASIC Commissioner, she pointed out that her bureau’s move was important, considering that today’s binary options investors are in a time of increased vulnerability.

ASIC’s prohibition of binary options sale to retail clients can be dismal news for binary options traders and enthusiasts. We feel sorry for these individuals as this time could be disappointing for them. Nevertheless, we respect the Australian regulator’s latest step. 

Since the ASIC believes that trading binary options could lead to significant disadvantages to Australian retail clients, the group reckoned that the most optimal measure to take is to forbid this financial instrument for the meantime. The ASIC is a government institution, and we believe that they are working for the Australian trading public’s best interests.

Binary Options Zone Copyright © 2019