Warning to Investors to Take Caution When Considering Binary Option Investments

In a release put out by Secretary of State of Missouri, Jason Kander, he warns investors to be aware when it comes to binary option investments. A binary option contract is based on the investor’s prediction of an underlying security’s value at a predetermined date. With binary options, traders place trades based on whether they believe an underlying asset will be above or below a certain price at a certain time. They provide a way to trade markets with capped risk and capped profit potential based on a ‘yes’ or ‘no’ proposition. There are two possible options: the investor may receive a fixed amount of money for guessing correctly, or lose the entire investment for guessing incorrectly. Earlier this year, a London-based binary options investment scheme that targeted investors through email, a website and telemarketers was shut down. Investors in the scheme were instructed to transfer money via online credit card payments. Binary options are appealing to investors because they offer an easy-to-understand investment opportunity and a perceived low entry cost. Contracts can be executed for hourly, daily or weekly terms.

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