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ASIC looks to ban binary options

The corporate regulator has proposed a ban on the sale of binary options and Contracts for Difference to retail clients.

The Australian Securities and Investments Commission (ASIC) is concerned that retail investors suffered from binary options.

Binary options allow people to “bet” on the price of an “asset” over short time-frames and are usually sold on websites from exotic locations with little corporate governance laws.

ASIC Commissioner Cathie Armour tells Ross Greenwood consumers lose their money 80 per cent of the time, when it comes to binary options.

“Effectively it’s an all or nothing outcome, you basically are putting down money on the basis that an event will occur.

“We can’t see that they’re a useful tool for risk management or hedging.”

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