Investors warned about binary options trading sites by B.C. Securities Commission

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      The British Columbia Securities Commission has issued a warning to investors about binary options trading platforms on the Internet.

      Today (January 10), the provincial regulator advised the public to be cautious about using unregistered platforms, such as RBOptions, to trade binary options online.

      "A binary option is a type of options contract that references a variety of underlying instruments, including, but not restricted to, stocks, commodities, currencies and interest rates," BCSC stated in a news release. "The returns on these products are dependent on whether the asset underlying the binary option rises above or falls below a certain amount. The instrument is called a binary option because there can only be two outcomes under the options: the payment of a specified amount if the threshold amount is exceeded; and, typically, no payment at all if the threshold is not met. Like other options products, investor losses can be magnified by using binary options to speculate; however, binary options can represent even more risk, as they are usually an 'all or nothing' product."

      Binary options aren't necessarily illegal, but the commission noted that a "large portion" of binary options is being illegally traded via unregistered platforms.

      "Furthermore, many of the online platforms offering binary options are located offshore," the commission said. "The BCSC urges British Columbians to exercise caution when dealing with firms that are not registered to trade or advise in B.C., as it greatly lessens investors’ ability to recover their money.

      BCSC's warning also pertains to 24options.com, GOoptions.com, and TradeRush.com. Those binary options firms are on the regulator's Investment Caution List.

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