The Netherlands seek to ban advertising in binary options, CFDs

M

mlawson71

The Authority for the Financial Markets (AFM), the Dutch financial regulatory body, is the latest regulator to launch a consultation on the ban on advertisement of risky investment instruments, such as binary options, contracts for difference (CFDs), futures and warrants. The regulator emphasizes on the harm caused by instruments with leverage of 10:1 or higher.

Consumers can lose money quickly when trading in the above-listed instruments, which the AFM calls “toxic”. Long-term investment does not yield good profits, either. The regulator’s move is an important step in the fight against harmful financial products to which retail consumers are exposed, it noted.
 
If these firms cant be regulated then they need to be shut down, too much risk of getting scammed and ripped off.

However, it is not leverage that is harmful. It is people's greed and ignorance that causes them to lose large amounts of money. Addictiveness is also a big factor.
 
southall said:
However, it is not leverage that is harmful. It is people's greed and ignorance that causes them to lose large amounts of money. Addictiveness is also a big factor.
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Well, no, it is the leverage.

You can over-trade as much as you like on an $80 account, but you only start loosing large amounts of money when you do so with stupid levels of leverage.
 
Tim Smith said:
You can over-trade as much as you like on an $80 account, but you only start loosing large amounts of money when you do so with stupid levels of leverage.
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If you stop people owning liquid instruments on leverage then they will just buy low priced or penny stocks on low or no leverage, the end result will be the same, huge losses.
 
southall said:
If you stop people owning liquid instruments on leverage then they will just buy low priced or penny stocks on low or no leverage, the end result will be the same, huge losses.
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The chance to make money in penny stock is not zero.
There is zero chance to win in binary scam or over leverage CFD by those bucket shops.
 
galvinlee888 said:
The chance to make money in penny stock is not zero.
There is zero chance to win in binary scam or over leverage CFD by those bucket shops.
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Agree about Binaries but the quote in opening post also mentions CFDs, and Futures.

Actually the reason why people lose on binaries (ignoring the scammers who wont payout profits) isn't because of leverage either, its because the spread is so wide making the options very expensive.
If Binaries were priced 49-51 they would be much better chance of making money. At 42-58 (or worse), there is little chance of coming out ahead after 5 bets.
 
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southall said:
Agree about Binaries but the quote in opening post also mentions CFDs, and Futures.

Actually the reason why people lose on binaries (ignoring the scammers who wont payout profits) isn't because of leverage either, its because the spread is so wide making the options very expensive.
If Binaries were priced 49-51 they would be much better chance of making money. At 42-58 (or worse), there is little chance of coming out ahead after 5 bets.
More...

Those scamner (who just happen the "house" here) will continue to increase the spread until they have sure win edge.

It is good you mention 52/48. Most of the day trader not even realised their setup is actually worst than 48/52 after they include commission & sluppage. Zero chance for them to survive in long term.
 
southall said:
Agree about Binaries but the quote in opening post also mentions CFDs, and Futures.

Actually the reason why people lose on binaries (ignoring the scammers who wont payout profits) isn't because of leverage either, its because the spread is so wide making the options very expensive.
If Binaries were priced 49-51 they would be much better chance of making money. At 42-58 (or worse), there is little chance of coming out ahead after 5 bets.
More...

Yeah, I agree with you there... why CFD/Futures and warrants... (which are basically options). I would say, anything that is regulated through on-exchange should not be a problem... for christs sake... that's what we pay the regulator for!!!

But something in me says... stupid is stupid does... why trade binaries with wide markets? Stupidity can not be regulated, they will find another pit to throw their money in....
 
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