Australia renews retail ban on Binary options ten years additionaly

68% of the wholesale clients who traded binary options for retail investors lost their money since the ban on offering them was in effect. The product intervention order did not apply to them.

The Australian Securities and Investments Commission has extended its ban on binary options to 1 October 2031. This ends any doubt that the regulator will reconsider its position ten years later.

Binary option brokers ( and Binary options providers allow clients to speculate about the occurrence or not of a specific event within a given time frame. This could be a movement in the price or a market index, or an event related to an economic event (e.g. central bank interest rate decision).

Binary options can be risky

The product intervention order prohibiting the distribution and issue of binary options by Australian brokers to retail clients was enacted on 3 May 2021.

Financial watchdog said the decision prevented retail clients from losing their money in binary options trading in Australia. It also stated that the ban extension will ensure that protections are maintained in line with those in place in similar markets elsewhere.

Karen Chester, ASIC’s Deputy Chair, stated that binary options were high-risk financial products that can cause serious harm to investors. Before our ban, retail investors suffered losses in the millions. This important protection for retail investors will be maintained by extending our ban on binary options until 2031.

ASIC compiled data from five binary option issuers licensed to produce a report summarizing how the order was received. ASIC discovered that retail clients suffered significant net losses in trading binary options 13 months before.

According to regulators, the ban has reduced the risk of serious detriment to retail customers resulting from binary option trading. They remind the industry that retail clients have not suffered losses or made profits from trading binary options with licensed issuesrs since the effective date of the product intervention order.

Comparatively, 68% of wholesale clients lost their money trading binary options during that time period because the product intervention order doesn’t apply to them.

Retail clients lost 80% trading binary options

ASIC discovered that between 2017 and 2019, 82% of retail clients lost money when trading binary options. Due to the following product characteristics, retail clients are likely to suffer cumulative losses over time.

ASIC has taken several actions to address concerns regarding binary options. These include enforcement action against misconduct, public warning notices, other statements, surveillance projects, thematic reviews, stricter regulations, extensive retail client education campaigns, and guidance for binary option issuers.