SEC & Binary Options

[xyannix]

Interesting piece out of the SEC.

The Securities and Exchange Commission on Thursday warned investors about the potential risks of investing in “binary options,” securities, a form of options contracts whose payout depends on whether the underlying stock or other asset increases or decreases in value. The SEC also charged Cyprus-based Banc de Binary with allegedly selling binary options to U.S. investors without first registering the securities as required under federal securities laws. The SEC said Banc de Binary broadly solicited U.S customers by advertising through YouTube videos, spam e-mails, and other Internet-based advertising. Read an SEC investor alert on the subject. http://www.sec.gov/investor/alerts/ia_binary.pdf

The problem with this is that Banc De Binary happens to be a regulated binary options broker under the FSA in the United Kingdom http://www.binaryex.com/regulated-binary-options/ . They do not accept US based traders and they are even trying to get CFTC approval to accept US traders.

Binary Options is great for gamers, gamblers and some investors, so why not just work out a way to regulate it like the UK, Cyprus and other EU countries are doing?

 

[atticus]

Buying an ATM digital at 68/100 is great for traders?

 

[southall]

Even if you get quote a more realistic price than 68.
They will still cheat by rejecting your orders once your account turns too profitable for their liking.

 

[slickpick]

Why not just trade a delta hedged vertical and call it a day?

 

[arbs-r-us]

Quote from atticus:

Buying an ATM digital at 68/100 is great for traders?

It might be if on a $100 stock the rebate is -80% and the 30 day conversion is $5 bid... lol!