Binary Options

iAMaLONDONER

MoneySaverLog wrote: »

All to do with taxes. Your winnings from gambling are free of tax. Returns from Investment are not.

I see- I assume it applies to spread betting and the like too

bowlhead99

iAMaLONDONER wrote: »

I see- I assume it applies to spread betting and the like too

It depends what you are lumping in with spread betting as "and the like"...

Spread bets aren't taxable (if you're looking at it as a UK taxpayer).

However, CFDs (contracts for difference) which can provide very similar exposure to leveraged gains and losses on the same underlying assets, are taxable. Similarly a 'real' option contract that you buy for a price and sell for a different price, could produce a taxable gain. Whereas if you go to a spreadbet provider and bet on the change in underlying value of the option, you don't pay tax on your betting gains.

In some situations it can be handy to be using a taxable investment (for example, if you're in a situation where you have sufficient CGT allowance or CGT losses to cover the potential gains while any losses would allow you to bank more CGT losses for the future). There may also be a cost disadvantage to be doing a deal via spreadbet (e.g. size of the spread or margin interest payable, versus what it would cost you to be working with the real underlying financial instrument).

However, spreadbets can be a useful tax-free method of getting exposure to a market or a company if you can handle the level of risk involved.

angelsinvestors

Really Nice Discussion! I am using short term trades and getting much benefits. To this way you can Risk in Loses.

SallyAnne

I came across "Binary Options" when I was researching Jason Taylor and his Brit Method which apparently is a replica of the Aussie Method, which boasts the "Binary Option" for quick profits, that has been already documented as a scam. The Brit Method is apparently a replica of the Aussie Method by the same scammers. To get the full story watch https://www.youtube.com/watch?v=JyMOArGBmWk

Dave.44

Are all Binary Option sites scams?
Who gains from it?
Where does the money come from to make the payout?
If a computer model gives an 80% success rate on each trade how does the owner of the platform make any money? Where does the payout come from. It can only be from the bulk of traders failing and losing all their money. So are they just following their nose and not the computer models?
Brokers get their percentage on every trade. But BO's are not being traded. Are they? Spread betting is traded after a fashion so there is real money there to pay out gains, if any.
I for one cannot understand the principle of the BO business.
Any help appreciated.

eskbanker

Dave.44 wrote: »

I for one cannot understand the principle of the BO business.

Some would say it stinks....

jimjames

Dave.44 wrote: »

Are all Binary Option sites scams?
Who gains from it?.

Not sure about all but it certainly seems like most are. The owner may be the one making the money

Dave.44

I just read a long article about how bad it is in Israel, and has been in Cyprus. Sites based there are offering services abroad. Even the best of the Binary Option sites are using sharp practice, deception and half truths at best. A few people seem to be successful at it but at least 80% lose all their money very quickly. On most sites it amounts to theft by a combination of "terms of agreement" that allow it and highly exaggerated sales practice, along with techniques that draw people into it with no escape and no way to get money out. If you accept a bonus you must typically trade 25 times your total deposit before you can take any money out, etc, etc.

I just wondered whether there are any properly regulated sites based in the UK where you can get some of your money back when you begin to fail.

Also, does a computer model actually exist that can make a better than chance prediction? If I devised such a software model I would be using it myself and keeping it secret. Or at least I would expect a very high fee to let others use it. It would seem possible to develop one based on technical analysis but computers don't read the news. Entering daily events to the model would be tricky.

The owner and his sales team are clearly the ones making the money.

I think it goes like this. As you typically gain 80% to 90% profit on a successful trade, then assuming that on average the site sees equal success and failure, the site makes at least 5 to 10% on average from all trades. You need to be a very sharp analyst to beat those odds, along with any little adjustments that the site makes on close completions where their model does not follow the true one exactly. This is allowable under their terms.

They give you help from analysts if you are about to give up so you begin to profit for a while, maybe hand over a bit more cash, then lose it all.

Well, now I know where the margin is for the broker/hosting site.


Anyone got anything to add or is that about it.

paddyrg

Dave.44 wrote: »

Anyone got anything to add or is that about it.

https://www.fca.org.uk/consumers/binary-options-uk is the FCA's thoughts on Binary Options.

JohnRo

The binary option is

ignore this and keep your money.

pile in and lose your money.