The following is a guest blog post:
The European Securities and Markets Authority (ESMA) in early 2018 had agreed to take some measures to regulate the trading of binary options and CFDs (Contract for Differences) in the European Union. A ban on Binary Options trading, distribution or sale to the retail investors was implemented in the European Union while restrictions were placed on the marketing, distribution and sale of CFDS. These steps were taken to protect the investors interested in Binary Options and CFDs.
ESMA had further decided to renew the prohibition of marketing, sale or distribution of Binary Options to the retail investors and that it would be implemented from 2nd October 2018. While reviewing the intervention measure, ESMA had considered the different features of Binary Options. Ever since the talks of changes were made known, the traders had raised concerns that the new rules could disrupt the market.
IQ Option Introducing FX Options
Understanding the situation of ban and restrictions on Binary Options and CFDs respectively, IQ Option has come up with a new instrument called „FX Options“ for the European Union members. FX Options is available for marketing, distribution and sale to the retail investors for only the European Union traders. FX Options complies with all the norms and regulations of ESMA. Non-European traders do not have access to FX Options as they can still trade digital options and Binary Options.
A Little More on FX Options
FX Options is actually a combination of Forex and OPTIONS and IQ Option has set the minimum investment amount at €25 or $30 only. The expiry time of FX Options is „end-of-the-hour“, but the trader can even close the deal before maturity. This means that the traders can sell the option well before time in order to manage losses and secure the profit they earned.
The trader will gain significant profits on a correct prediction about the price movement of an asset. In case of FX Options trading, there is ‘unlimited upside’ that means there is no fixed cap on the return the trader receives. As long as the FX Option position is open and the price action directs in the predicted direction, the trader will continue to earn profits. At present, IQ Option offers only 6 forex pairs for trading FX Options. Thus when trading FX Options, one will enjoy some features common to Forex and Binary Options. In case of a loss, it may be lesser than 100% of the invested amount for the out-the-money options.
Therefore, FX Options combines some of the features of Forex and general Binary Options, and currently, it is the only Option available to the European Union members. It offers dynamic currency trading with risk management tools and unlimited upside. The EU traders who had been missing the Binary Options and digital options will now be able to enjoy the FX Options without violating the norms of ESMA.
To know more about FX Options, click https://www.iqoptionmag.com/fx-options.html