With regard to contracts for differences, known as CFD, the sale will be regulated, imposing new maximum limits on leverage and establishing more stringent requirements. It emerged that, due to binary options and CFD, small investors had been subject to continuous losses, with a liability of no less than euros per person, and in some graver cases, 29, euros. Worrying authorities are not just the products themselves, but also those who trade them, as they are regularly in conflict of interest with their customers.

The issue of binary options, already the subject of discussion and prohibition in different parts of the world, has been established by the ESMA as an imminent threat to consumer safety. The temporary halt to the marketing, distribution and sale of binary options in Europe to retail investors is the natural evolution of a global policy that is concerned by the excessive ease of access to products that are similar to gambling, those that have very little likelihood of seeing meaningful financial gain.

The first step in protecting consumers from binary option fraud is to make CFD investments less risky. The ESMA is intervening so that losses cannot exceed investments, whilst monitoring the use of financial incentives or "levers" commonly used in binary option trading.

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The ESMA has also established that to avoid crippling losses, accounts that exceed one loss margin will be closed automatically. In the meantime, traders should continue to proceed with caution as binary option fraudsters continue to aggressively market high return trades. Always make careful and informed trading decisions, relying on regulated brokers, and being aware of "get rich quick" scams that lurk behind every corner. The content of this article is intended to provide a general guide to the subject matter.

Specialist advice should be sought about your specific circumstances. All Rights Reserved.

Binary Options Tips: What to Ask Your Broker

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Restrictions on trading of binary options and CFD

To print this article, all you need is to be registered or login on Mondaq. You either make money. Or you don't. But if the option expires out-of-money, meaning the investor made the wrong choice, the wrong trading platform may take the entire amount of the money you invested. With no refund.

How to Trade Binary Options in Europe after ESMA ban |

And no legal way to recoup your losses. Luckily, the process to choose the right brokerage firm doesn't need to be long or complicated. These are just a few binary options tips that can help you find the right broker.

Are you regulated? While regulations are new, they are vital to ensuring that you are dealing with a knowledgeable and honest trader.

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What assets can I trade? What assets are available will vary greatly between firms. Choose one that trades assets you're already interested in and has a variety of trading possibilities. What deposit methods are available to traders? Only go ahead if you're comfortable with the deposit methods the broker is telling you is available.

Malta Binary Options: Gaming or trading?

Again, different brokers have different deposit method options. Which trading platform are you using? There aren't that many trading platforms, so do your research and make sure they trade on the one you're most comfortable with. What educational tools do you have at my disposal? What educational tools they offer will vary as well.

Choose one that helps you learn as you grow. Binary option brokers do not and are not responsible for withholding taxes.

Malta Binary Options

The tax treatment of binary option profits will vary based upon which EU country your are resident is. In general, binary options are classified as financial instruments subject to either income or capital gains tax. Although the term temporary is used, it appears this is just the mechanism the regulator is using to implement their permanent ban.

As mentioned previously, this ban only applies to EU and UK firms offering binary options. If a EU citizen decides to deal with an overseas financial service provider, they are free to do so. Home What are binary options? EU Binary Options.