I don't get what you all are saying. Go back to the facts: Binary options can be made using vanilla options so by that logic Vaniall options are gambling. As such, vanilla options available via "exchanges" should be regulated by a gmaing comission. Um ok - if that's what you want. You still get the same damn result whereby 90% of retail traders lose.
None of you have ANY problem with market makers making their money off of YOUR losses. So the fact that they have a rubber stamp, ahem, excuse me, licesne to do so and even pay out IBs based on those losses directly and in writing and with the FSA's blessing is all cool. But these unregulated binary options companies - yes - they're the problem
My god ! You guys are seriously with your heads in the sand.
So let me straighten it out for you.
1. regulation is good. Unfortunately, it doesn't CURRENTLY do very much to protect customers from fraud. It creates an insurance plan ONLY if the broker goes bankrupt and files for chapter 11, or similar dissolution clauses in the country of incorporation+regulation. HOWEVER, this means jack #$%# to your cash when it comes to what the broker can and WILL do to your account if you start winning. Anyone to say different is either (1) trading with a bank/anonymous ECN or (2) is deceiving themselves because a market maker CAN NOT make money if you win (PERIOD). Please don't try to tell me otherwise, I am a little too well versed on the subject (have traded with for and against the banks with options, forex, unlisted stocks and others).
2. Binary options WILL be covered by all these niceties you people want to see in financial products (insurance and corporate oversight) and it's starting with CYSEC (and moving into all of MIFID countries thereafter including France, Germany, Italy, etc...). To label this a joke makes no sense to me as the same rules apply in CYSEC as they do in the FSA but with a lesser level of protection in terms of bankruptcy protection.All other marketing, sales, capital requirement and other restrictions are comparable.
3. The fact is, many people do not want regulation on products like BO because it's a pain in the **** to open an account, the company can hide behind more draconian terms and conditions as allowed by the regulators and actually don't need to return money all that fast if the customer was deemed to have "abused the system". Sound familiar - oh yeah, cause it's the same damn huey we hate about unregulated brokers. Yes, regulation mitigates a great deal of this but not by that wide a margin.
So for the last time - I am not against regulation. I am for it. But I want it there to protect ME and YOU. Not the damn tax authorities or the regulators themselves. What the NFA/CFTC in the US did for FINRA is a travesty . A damn abomination. I do agree that the FSA is far far far better for the trader. But, it comes with a massive and problematic caveat that only people who have actually dealt with the FSA know:
There are only very rough guidelines provided by the FSA. 95% of them are NOT abided by.
Ill give a quick example of one i love to hate:
It is required by the FSA that a risk warning appear at EYE level on every company's marketing documentation; digital or otherwise. In my time on the net, i have found 1-2 companies who abide by this fully. Show me a web site of a broker that has a risk warning above the fold (so that you DO NOT need to scroll to find it). Why don't the brokers abide by this? It's simple - there's stuff that's open for interpretation. Why is this, probably the most crucial and problematic aspect of the business, the fact that people can lose buttloads of cash, hidden from view at the bottom of the screen if it's required to be at EYE level?
I am just trying to open your eyes. Stop eating this doctrine of regulation being better than nothing. Cause even if it is, it's light years from being good for you directly. It's only via indirect means that you gain very much from this. So to shoot down binary options is preposterous -- at least as it pertains to the industry being regulated by MIFID. It simply makes no damn sense.
bless your soul.