Berlin’s EiG Forum makes us rethink the binary options conundrum

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binary options trading and gambling

A major event for the gaming industry is taking place in Berlin from 21st to 23rd October 2014, in the shape of the Excellence in iGaming (EiG) Conference. For some this news should have nothing to do with us here at binaryoptionswire.com and our readers who are into online retail investing…or maybe it does? Well, if are into binary options trading then you must have an idea about how the two might correlate. Indeed, among the exhibitors at the Berlin Forum are the two most popular binary options platform and technology providers, namely TRADOLOGIC and SpotOption.

Therefore, events such as the EiG Conference bring to the fore once again the debate whether binary options do not belong to the financial trading industry but rather in the gambling industry. Indeed, even after the EU deemed it a financial investment vehicle, which EU based regulators, such as CySEC quickly jumping to offer licenses to binary options brokers, there are still jurisdictions such as the UK, where binary options trading and the agents offering it come under the scope of the Gaming industry and its relevant watchdog. This may change in the future, as we have already reported that UK authorities are re-examining their stance and plan to streamline their approach to the rest of the EU, but still currently binary options are considered gaming and not investing.

Those defending binary options, arguing that they are legitimate financial products are having their greater difficulties when it comes to the super short term types of binary options, often called “turbo” binary options, that come with extremely fast expiry times, of sometimes as little as 15 seconds and a maximum duration of five minutes. Of course this is the most extreme variant of binary options trading and they are very high risk and associated with a very high degree of unpredictability, but they are nevertheless quite popular as many find them exciting, fascinating, entertaining and definitely lucrative as they could potentially result in very high returns in absolutely no time, provided your trade ends in the money.

The end outcome of binary options of such short time-frames cannot be predicted using standard indicators, as the periods are extremely short and this is perhaps why many compare turbo binary options to a game of roulette, where no prolonged decision making is involved and where the “player” simply has to choose one of two possible outcomes, based on probability, sequences and of course, luck. The fact that short term binary options are more suited for the more risk tolerant is because the larger risk levels they have do not comply with any sort of fundamental analysis, rendering them completely unpredictable.

However, those still arguing that this is not gambling but still trading, just of shorter duration, highlight the fact that the outcome of each trade placed is always derived from market action and that it is a small scale version of market operations, which still has its own specifics and oddities that need to be learned, such as mini-trends, reversals or support or resistance level price action.

At the end of the day though, labels are of little significance to traders, especially if they manage to predict successfully. However, it would be useful if consensus could be reached, leading to more streamlined regulatory frameworks and enhanced security for binary options traders of all durations, short or long.

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