"Binary options" is a scam disguised as an option, be careful
Binary options were once packaged as a new generation of derivative financial products. In fact, this type of "product" has long been dethroned in developed countries and has become the target of regulatory criticism.
Although binary options, American options, and European options all contain the word "option" in their translated names, they have no similarities. To be precise, binary options are not options.
This article details the determination of developed countries to crack down on binary options and exposes the true face of binary options - a gambling scam in financial disguise.
"Binary options" are disguised as options, but doing this business is considered a crime of opening a casino. Why?
Binary options are also called "digital options" or "all-or-nothing options". They are a type of option with only "put" or "call" options.
Binary options have the characteristics of high profit and high risk. The underlying assets can be foreign exchange rates, stocks, commodity prices and indices.
Several developed countries have explicitly banned binary options and portrayed them as gambling. The FCA issued a document in 2019, clarifying that all institutions selling binary options will be banned in the UK. Not only British companies but also foreign companies sell binary options products in the UK.
Even the original document clearly stated that packaged binary options products are not allowed and are gambling products in financial disguise.
However, binary options are not legal financial products in mainland China. From a professional perspective, "binary options" have the following points that are inconsistent with the traditional definition of options:
First, binary options are not legal option products.
Options are a financial product that is traded in legal futures trading venues with the price of stocks, futures and other varieties as the underlying. The transfer of rights between buyers and sellers must be completed during the transaction.
The mainland's "Regulations on Futures Trading Management" have clear provisions for option contracts, stipulating that the buyer has the right to buy or sell the agreed subject matter at a specific price at a certain time in the future.However, there are no relevant regulations for binary options.
Second, binary options do not have the link of exercising and transferring rights. In essence, they are gambling behaviors that use price trends as speculation objects and are accidental, speculative and speculative.
"Binary options" determine the property gains and losses of traders based on the rise and fall of the underlying price trend. The transaction price and profit and loss range are determined in advance, and the profit and loss results are not linked to the actual price rise and fall. Traders do not have the link of exercising and transferring rights. The transaction results are accidental, speculative and speculative. In essence, it is a gambling behavior of "betting on size and winning or losing".
In my early years, I heard that some crypto CEX wanted to open or had already made some packaged binary options structured products. In essence, such products have been identified as gambling in financially developed countries.
In mainland China, option learning and education are relatively backward. This year, there are also many illegal online platforms doing business similar to binary options.
This type of business is essentially a gambling model of "betting on size".
Therefore, even if I am an ordinary player and do not engage in professional options trading, it is very important for us to understand some basic options knowledge and see through the underlying logic of those option structured products in order to avoid pitfalls.
