On 7 April 2014 CySec announced that they had fined Banc De Binary 10,000 Euros after it had concealed material information in its request for authorization CIF submitted to the commission in August 2012, namely concealed the existence of close links between it and another company. 33Banc De Binary claimed to have an office in New York City at Trump Towers, but this was in fact a virtual office space with no significant physical presence. 34 Trading and offering financial services to US consumers without gaining a license first from US regulators is illegal, as it would mean the client would have no protection. The company also claims on its site at its UK Companies House report 35 to have an office at 1 King Street, EC2, in the City of London, but this, like its New York City address, is a virtual office with no physical presence. 36 Banc De Binarys UK Companies House report says that they are based in Cyprus.On 6 June 2013, Banc De Binary was charged by both the Commodity Futures Trading Commission and the Securities and Exchange Commission for alleged violations of US financial regulations. In the same press release the CFTC warned more generally of fraudulent schemes involving binary options and their trading platforms. 3 On 30 July 2013 the SEC obtained a preliminary injunction from U.S. District Court for the District of Nevada to prevent and freeze any further trading with US customers. 32 Binary trading in the US is legal, but only if done through properly registered and regulated exchanges such as NADEX. 37 38 39 Both the CFTC and SEC working in conjunction with one another filed civil suits against the company, seeking disgorgement, financial penalties and other preliminary and permanent injunctions against the company. 40 41 In civil suits filed in Nevada, the SEC and CFTC allege that the company was offering off-exchange traded options to US customers and unlawfully solicited US customers to buy and sell options. The CFTC and SECs suit also alleges that it did not limit its offerings to eligible contract participants, contrary to US regulations 3 40 a fully regulated broker would complete credit checks on customers to ensure that those with low finances did not trade with them. Amongst the allegations made by the SEC is that Banc De Binary induced people with limited funds, including one unemployed person with less than 1000, 42 to open accounts. In response to the US charges the company put out a statement that made no mention of its legal problems, but instead incorrectly implied that they were in negotiations and that they had voluntarily left the US market, when in fact the SEC had taken an injunction out to stop them. 30 43... Banc De Binary is voluntarily discontinuing its operations in the United States. The United States Commodity Futures Trading Commission and Securities and Exchange Commission have asserted that Banc De Binary is not permitted to offer its binary option products to U.S. residents without registering with those agencies. We are currently in discussions with the CFTC and SEC about these issues, but in the interim, we have discontinued all business with U.S. residents.As of October 2013, the company was rated F by the United States Better Business Bureau because 31 complaints had been made against it, including 9 which were unanswered. The BBB report also offered the opinion that the site essentially allows investors to gamble on the future price of something at a point in time. 45After receiving at least one complaint from a Qubec investor who traded through Banc De Binarys platform and was unable to recover his investment, the Autorit des marchs financiers (AMF) warned investors about the company. It noted that a bonus of 50 of the opening deposit is available, but customers who accept the bonus are not allowed to make withdrawals until they have made trades equal to 20 times their initial deposit. The AMF also pointed out that, due to the all or nothing nature of binary options, an investor who wrongly predicts market movement will lose his entire investment. Banc De Binary is not registered with the AMF. The AMF also, like the CFTC, included a more general warning about the risk of fraud in binary options trading in the same press release. 48A binary option is a type of option where the trader takes a yes or no position on the price of a financial asset, and the resulting payoff is all or nothing. Because of this characteristic, binary options can be easier to understand and trade than traditional options.Binary options are cash-settled as European-style options, meaning they can be exercised only on the expiration date. If at expiration the option settles in the money, the buyer or seller of the option receives a pre-specified amount of money. Similarly, if the option settles out of the money, the buyer or seller receives nothing. This allows for a known upside (gain) or downside (loss) risk assessment. Unlike traditional options, a binary option provides full payout no matter how far the asset price settles above or below the strike (or target) price.Despite the term all or nothing, depending on the actual trading platform, nothing can actually mean something. This means that at expiration the owner of the option may actually get a certain payout even if the option expired out of the money.Italiano:Capire le Opzioni Binarie 44Espaol:entender las opciones binarias 44: 44Deutsch:Binre Optionen verstehen 44Portugus:Entender Opes BinriasMeet Genavieve, a wikiHowian of over three years who has made over 2,900 edits and has reviewed over 22,000 changes by other editors. She spends her time on wikiHow writing, adding tips to articles, reviewing recent changes, playing games in the forums, and adding videos. Shes proud of teaching herself how to design wikiHow Talk pages and now puts those skills to use regularly, helping out other users. She loves the wikiHow community: Everyone is always friendly and makes me feel welcome so I really have made lots of friends and developed a bond with some of these amazing people.Binary Options are options that pay either a fixed amount or nothing depending on whether or not a certain condition is fulfilled when the option expires. This is unlike a regular option whose payoff is dependent on the price of the underlying asset relative to its strike price.
