Binary options a risky business for consumer

5/24/2017

In recent years, the Swedish financial supervisory authority Finansinspektionen (FI) has received an increasing amount of calls from consumers who suffered from a purchase of binary options. In a new report, FI warns of the risky investment form.

In the report, FI states that binary options are an inappropriate product for the vast majority of consumers because the products are very risky. The likelihood that the buyer loses all or part of the investment is imminent.

Terms and costs can vary widely between products, which makes it difficult for consumers to understand the risks with them. At the same time, they are often marketed aggressively, not rarely via social media.

As early as July 2016, the European Securities and Markets Authority (ESMA) issued a warning for binary options and other "speculative" products. In Europe, Belgium and France have introduced a framework for the sale and marketing of binary options.

Download the report on FI:s website (in Swedish)

Learn more about investment fraud

Fact binary options

A binary option is a product where the buyer can only speculate in two possible outcomes: that a certain will or will not circumstance occur. Shortly described, it is about guessing the price development of an asset at a certain time, such as a share, currency or commodity.