The British Columbia Securities Commission is warning investors about Internet-based binary options trading platforms. The BCSC has recently become aware of RBOptions, an unregistered online trading platform claiming to operate out of Toronto, Ontario. The BCSC urges B.C. residents to use extreme caution if approached by this company.
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. 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.
Some binary options are listed on exchanges and traded by registered individuals, but these represent only a portion of the market. The BCSC is concerned that a large portion of binary options are illegally traded through unregistered and unregulated online trading platforms.
Furthermore, many of the online platforms offering binary options are located offshore. 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.
In addition to RBOptions, the BCSC is also warning the public about 24option.com, GOoptions.com, and TradeRush.com. These binary options companies were placed on the BCSC Investment Caution List in August 2013.
Investors, agents or members of the public who have been approached by or have information about RBOptions, 24options.com, GOoptions.com, TradeRush.com or any other unregistered binary options trading platforms are encouraged to contact the BCSC inquiries line at 604-899-6854 or 1-800-373-6393 (toll free).