Scam Alert: Binary Options Demand See SEC Registration – Auto Responder Training Inside!


March 10, 2016 Facebook Twitter LinkedIn Google+ MLM & Affiliate Marketing News



Scam Alert Binary Options

Binary options MLM? Demand to see SEC registration.

Posted: 09 Mar 2016 06:07 PM PST

Over the past year or so I’ve seen an increase in financial service related MLM opportunities. Typically these schemes are registered somewhere shady in Europe, however their primary source of investors is the US. Back in 2013 the SEC took action against Banc de Binary Ltd., a non-MLM binary options company. Although not MLM, Banc de Binary [Continue reading…] Source: Binary options MLM? Demand to see SEC registration.

Read the full article and join in the discussion over at BehindMLM.

About Binary Options

In finance, a binary option is a type of option in which the payoff can take only two possible outcomes, either some fixed monetary amount (or a precise predefined quantity or units of some asset) or nothing at all (in contrast to ordinary financial options that typically have a continuous spectrum of payoff). The two main types of binary options are the cash-or-nothing binary option and the asset-or-nothing binary option. The cash-or-nothing binary option pays some fixed amount of cash if the option expires in-the-money while the asset-or-nothing pays the value of the underlying security. They are also called all-or-nothing options, digital options (more common in forex/interest rate markets), and fixed return options (FROs) (on the American Stock Exchange).

For example, a purchase is made of a binary cash-or-nothing call option on XYZ Corp’s stock struck at $100 with a binary payoff of $1,000. Then, if at the future maturity date, often referred to as an expiry date, the stock is trading above $100, $1,000 is received. If the stock is trading below $100, no money is received. Under some contracts if the stock is trading at exactly $100, the money is returned to the purchaser.

The value of a digital option can be expressed in terms of the probability of exceeding a certain value, that is, the cumulative distribution function, which in the Black-Scholes equation is the Gaussian. Due to the difficulty for market-makers to hedge binary options that are near the strike price around expiry, these are much less liquid than vanilla options (that is, standard and ordinary call and put options). Dealers often replicate them using vertical spreads, which provides a rough, inexact hedge.

Though binary options sometimes trade on regulated exchanges, they are generally unregulated, trading on the internet, and prone to fraud. The U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have issued a joint warning to American investors regarding unregulated binary options.

On non-regulated platforms, client money is not necessarily kept in a trust account, as required by government financial regulation, and transactions are not monitored by third parties in order to ensure fair play.

On May 3, 2012, the Cyprus Securities and Exchange Commission (CySEC) announced a policy change regarding the classification of binary options as financial instruments. The effect is that binary options platforms operating in Cyprus, where many of the platforms are based, will have to be CySEC regulated within six months of the date of the announcement. CySEC was the first EU MiFID-member regulator to treat binary options as financial instruments.

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