Germany considers following the steps of other Western European authorities and to possibly impose a ban on trading in binary options and contracts for difference (CFDs), The Times of Israel reported late last week, citing Anja Schuchhardt, a press officer of the Federal Financial Supervisory Authority (BaFin) of Germany.
Germany’s BaFin mulls banning margin forex and binary options trading
- Thread starter mlawson71
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Is that because we've never seen a hedge fund, let along a FX retail trader, make money consistently over a few years on FX or "binary options" whereas plenty have suceeded in futures, stocks etc. ?
Or is it because it's an OTC market that is not centralized and loosely regulated ?
Or is it because it's an OTC market that is not centralized and loosely regulated ?
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I expect that they are concerned that this is targeting small retail traders and they want to protect them from what they probably deem gambling.
I reckon your second hint is on target, the issue here seems to be unregulated OTC products. But one has to read the fine print very carefully. Neither France, nor Belgium, or Germany are planning to ban margin fx trading per se. What they consider banning is the pushing of advertisement and trading via unregulated vehicles. I strongly assume that this does not include trading in spot fx, even on a leveraged basis, if it is via a regulated conduit. And you can think again why the Times of Israel is reporting this. Haifa and Tel Aviv are hotbeds for unregulated and grey zone bucket brokers, firms that train people to do anything to never ever let a customer walk away with a penny of his/her funded account. Obviously the latest developments in Europe will spell an end to a large portion of revenues those shady brokers are siphoning off the gullible.
Todays Binary options providers == The Bucket shops of Livermore's days.
They are scams. Where losers can lose as much as they want but if you start winning they make it harder and harder for you to get good fills when trading size. But losers can trade whatever size they want.
Retail FX shops are only a bit better in that they can hedge winners but still prefer losing punters as they dont have to incur the expense of hedging trades. Most accounts are free money, just let the client churn the account by over trading and over leveraging don't even have to bother to hedge the trades in the underlying market.
They are scams. Where losers can lose as much as they want but if you start winning they make it harder and harder for you to get good fills when trading size. But losers can trade whatever size they want.
Retail FX shops are only a bit better in that they can hedge winners but still prefer losing punters as they dont have to incur the expense of hedging trades. Most accounts are free money, just let the client churn the account by over trading and over leveraging don't even have to bother to hedge the trades in the underlying market.
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on the point, what do you think a regulator could do to permit margined fx trading but to weed out the foul apples? Only permit regulated brokers to solicit clients of a specific country? But what keeps the shady ones away from soliciting online, circumventing the laws? They are not regulated anyway and they could not care less what certain regulators have to say.
It's not regulated at all, therefore the governments have to deal with all the complaints flooding in when imbeciles lose all their money.
This is only happening because there's an abundance of stupid people.
There are FX traders who trade with properly sized accounts and don't use absurd leverage and make money. The rest are just gamblers.
This is only happening because there's an abundance of stupid people.
There are FX traders who trade with properly sized accounts and don't use absurd leverage and make money. The rest are just gamblers.
Agree, though without proper regulations all sorts of things would go wrong even with exchange traded products. I am generally against regulation and government oversight into every corners of our lives but am afraid it is necessary in financial markets. Too bad, too many idiots fuxx it up for the rest of us. It scared the heck out of me when IB announced a few months ago they would shut down leveraged fx trading in the US, fortunately they limited it to US markets as far as I know.
Max leverage of 7:1.
I've never seen serious money being run with more leverage than this.
Sure, but you are assuming "serious money", unfortunately there are lots of people out there that can easily spend a week choosing an item in Amazon.com worth a few dollars but waste tens if not hundreds of thousands of dollars worth of savings in an instant on some get-rich-quick scheme which a prudent person would stay miles away from.