Germany’s BaFin mulls banning margin forex and binary options trading

[d08]

Isn't it ironic how we need to time and again protect most people from themselves. And most often it ends in a hypocritical and cynical discussion because the state permits alcohol consumption and smoking and legalized gambling, all pursuits that wash ample tax dollars into government coffers while other vices and pursuits are strictly illegal. It will always result in a dishonest settlement of sorts. Lottery is legal but lawmakers have an issue with little John blowing his 500 dollar account. I don't think any limitation on the demand side makes sense. Regulations should always target the supply side and weed out black sheep.

It's because they don't get part of the loot. This is also why US regulators were so against online gambling on websites outside of US - they wanted their cut. And this is why local gambling is legal and even encouraged.
There's a huge number of people who have lost their life savings in casinos but everyone accepts it with "well, that's how it goes".

 

[Zzzz1]

That is in the US. And there is a reason. American companies, credit card operators, banks, and other financial firms were sometimes lawfully forced to tighten their controls to prevent money laundering but often also bullied into going way overboard on issues that would probably not stand in a court of law if challenged. So in the end I would agree it will for the average guy on the street in the US be pretty cumbersome to even open an online gambling account and fund it. But that's not always the case in Europe, sometimes for reasons of complex and outdated bureaucracy but most often because governments nor consumers want to be stifled in similar ways than people in the US.

Let me give you an analogy: pre flight security checks. In the US you have, in the name of safety, all sorts of check, you gotta take out your laptop, open shoes, walk barefoot around the security areas, limits on liquids,... It's Bin Laden's dream come true of sorts. Nothing like that exists in Australia, people will laugh at you when you pull out your laptop or start taking off your stinky shoes. Bought a coffee and bring it on board? Not a problem.

Regulations have to not just improve safety but they also have to be reasonable, meaning, proportionate to the assumed risk, in order to not overreach or overly limit people's lives.

The U.S. govt has made it pretty hard for a U.S. resident to trade any binary provider other than the regulated Nadex and Cantor exchanges, so it's definitely doable. Between blocking your methods of funding your account and scaring the semi-legit guys straight it's nearly impossible to fund and trade an offshore binary account now if you're a U.S. resident. At this point if you are able to fund an offshore account it's almost a sure sign that they're a scam.

 

[Sig]

That is in the US. And there is a reason. American companies, credit card operators, banks, and other financial firms were sometimes lawfully forced to tighten their controls to prevent money laundering but often also bullied into going way overboard on issues that would probably not stand in a court of law if challenged. So in the end I would agree it will for the average guy on the street in the US be pretty cumbersome to even open an online gambling account and fund it. But that's not always the case in Europe, sometimes for reasons of complex and outdated bureaucracy but most often because governments nor consumers want to be stifled in similar ways than people in the US.

Let me give you an analogy: pre flight security checks. In the US you have, in the name of safety, all sorts of check, you gotta take out your laptop, open shoes, walk barefoot around the security areas, limits on liquids,... It's Bin Laden's dream come true of sorts. Nothing like that exists in Australia, people will laugh at you when you pull out your laptop or start taking off your stinky shoes. Bought a coffee and bring it on board? Not a problem.

Regulations have to not just improve safety but they also have to be reasonable, meaning, proportionate to the assumed risk, in order to not overreach or overly limit people's lives.

No doubt, although last I was in Australia they still did the liquids thing on international flights but not domestic, which is about as asinine and irrational as the ban itself!

 

[Zzzz1]

Yes internationally they have to adhere to regulations of the destination country if it is stricter than their own regulations. Nothing they can do about. But air travel in the US is probably more cumbersome and frustrating than air travel between Russia and Afghanistan, and statistics show not any safer.

No doubt, although last I was in Australia they still did the liquids thing on international flights but not domestic, which is about as asinine and irrational as the ban itself!

 

[JackRab]

As @southall said... most Binary Options 'brokers' are scams. Why are they mainly active in FX? Because FX cannot be easily regulated. You trade 2 currencies... so which regulator should step in? Currencies are not traded on 1 designated exchange either, so... again who regulates?

CFD's are derived from the underlying stock, which makes it similar to futures... CFD's are not traded on an exchange either but generally on the broker's platform, usually agains the broker. If the broker is doing the right thing they should hedge their CFD trades with underlying stocks, but I doubt the dodgy ones do that.

Again, you trade mainly against the 'broker'/scammer and it's easy for them to delay payouts or run.

Both are also highly geared towards gambling, since it's leveraged... and the clients don't need to sign any forms stating they understand the risk etc... like in a futures account. So yes, good thing to ban them IMO..