Are you an EPFL student looking for a semester project?
Work with us on data science and visualisation projects, and deploy your project as an app on top of Graph Search.
Concept
Binary option
Summary
A binary option is a financial exotic option in which the payoff is either some fixed monetary amount or nothing at all. The two main types of binary options are the cash-or-nothing binary option and the asset-or-nothing binary option. The former pays some fixed amount of cash if the option expires in-the-money while the latter pays the value of the underlying security. They are also called all-or-nothing options, digital options (more common in forex/interest rate markets), and fixed return options (FROs) (on the NYSE American).
While binary options may be used in theoretical asset pricing, they are prone to fraud in their applications and hence banned by regulators in many jurisdictions as a form of gambling. Many binary option outlets have been exposed as fraudulent. The U.S. FBI is investigating binary option scams throughout the world, and the Israeli police have tied the industry to criminal syndicates. The European Securities and Markets Authority (ESMA) have banned retail binary options trading. Australian Securities & Investments Commission (ASIC) considers binary options as a "high-risk" and "unpredictable" investment option, and finally also banned binary options sale to retail investors in 2021.
The FBI estimates that the scammers steal US$10 billion annually worldwide. The use of the names of famous and respectable people such as Richard Branson to encourage people to buy fake "investments" is frequent and increasing. Articles published in The Times of Israel newspaper explain the fraud in detail, using the experience of former insiders such as a job-seeker recruited by a fake binary options broker, who was told to "leave [his] conscience at the door". Following an investigation by The Times of Israel, Israel's cabinet approved a ban on sale of binary options in June 2017, and a law banning the products was approved by the Knesset in October 2017.
On January 30, 2018, Facebook banned advertisements for binary options trading as well as for cryptocurrencies and initial coin offerings (ICOs).
Official source
About this result
This page is automatically generated and may contain information that is not correct, complete, up-to-date, or relevant to your search query. The same applies to every other page on this website. Please make sure to verify the information with EPFL's official sources.