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Cyprus SEC Pushing For Reforms to Standardize Binary Options Trading

22 April 2017 • Senza categoria

Lack of transparency and accountability has long been an issue within the securities industry.

Binary options fraud is a global problem, as more brokers use shady tactics like shell companies and virtual offices to make their numbers.

Now, the Cyprus SEC has pushed for reforms that will change the regulations surrounding Cyprus binary options.

Read on to learn more about what this entails, so you can adjust your strategy to make money with binary options.

New Regulations For Cyprus Binary Options

Since every trading platform for options is unique, getting the industry standardized has been a huge challenge. The Cyprus SEC wants to promote better, more ethical trading.

So, they have proposed solutions for monitoring the Cyprus Investment Firm (CIF.)

Broadly, the new goals surrounding the proposed changes to these options will protect investors, ensure they are properly educated about what they’re getting into and will require brokers to act in the best interests of their clients, not themselves and their commission.

They’ll also make sure that once the orders are executed, records of the trade are filed immediately. Orders will also be filled as soon as possible to ensure that customers get as close to the price as they were promised.

The Specifics of The New Regulations On Cyprus Binary Options

Let’s get into the details of what these proposed revisions mean, and what they seek to eliminate.

Pricing Will Be Quoted In Real Time

This means that potential buyers are given a bid/ask spread based on real time prices and what the market looks like in that moment. Clients will also be given a profit/loss statement informed by these real-time prices.

Opaque Strike Pricing Will Be Eliminated

The new regulations want to remove floating strike prices. Instead, the same pricing will apply to all traders, and any strikes will have to be listed prior to a trade being entered.

Ending Sub-5 Minute Trades

To get rid of binary betting, the proposal calls for an end to expirations under 5 minutes.

Ending The Restrictions Surrounding Trade Exits

Essentially, this gives parties the option to leave a trade earlier. It also requires 2-way pricing, so sellers are always aware of their potential closing price in real time.

Proposal For The Standardization Of Settlement Algorithms

When it comes to Cyprus Binary Options, the Cyprus SEC’s final proposal is a big one.

This part of the plan wants to mandate that all brokers must use the same algorithm to determine and calculate their pricing. This Algorithm would be regulated by the Cyprus SEC itself. The approved Algorithm will also be used to figure out the price and value of options as they get closer to their expiration.

This would put an end to the individualization of creating price strategies.

You’re Up To Speed On The New Cyprus Binary Options Regulations

Any changes to regulatory standards are always a bit of a challenge for brokers and buyers alike to adjust to.

This new proposal is no exception.

For more information and breakdowns on what to expect from this year’s market, check out our website and contact us.

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