The use of the names of famous and respectable people such as Richard Branson to encourage people to buy fake “investments” is frequent and increasing. Binary options “are based on a simple ‘yes’ or ‘no’ proposition: Will an underlying asset be above a certain price at a certain time? Traders place wagers as to whether that will or will not happen. Investopedia described the binary options trading process in the U. This is called being “in the money. This is called being “out of the money.
The bid and offer fluctuate until the option expires. 100 if the bet is correct, 0 if it is not. In the online binary options industry, where the contracts are sold by a broker to a customer in an OTC manner, a different option pricing model is used. Some brokers, also offer a sort of out-of-money reward to a losing customer. On non-regulated platforms, client money is not necessarily kept in a trust account, as required by government financial regulation, and transactions are not monitored by third parties in order to ensure fair play. Pape observed that binary options are poor from a gambling standpoint as well because of the excessive “house edge”.