Electronic trading major IG Australia has confirmed there will be changes to its offering in line with the ban on binary options introduced by the Australian Securities and Investments Commission (ASIC).
The broker has announced that binary products, including digital 100s and sprint markets, will no longer be available to its retail clients from May 3, 2021.
Digital 100s are based on a single statement with a yes or no answer, and enable traders to speculate on the likelihood of a market event taking place. If traders predict the outcome correctly, the trade will return a profit. If not, they lose their original stake. IG currently offers digital 100s on a number of major economic indicators, such as US non-farm payrolls and US initial jobless claims.
Sprint Markets are super-fast trades, with timescales from one minute to one hour.
Traders can find out more about the changes affecting Australian retail clients of IG here.
Let’s note that ASIC has made a product intervention order banning the issue and distribution of binary options to retail clients. The ban will take effect from Monday 3 May 2021 after the regulator found that binary options result in significant detriment to retail clients.
ASIC reviews in 2017 and 2019 found that approximately 80% of retail clients lost money trading binary options.
ASIC’s binary options ban brings Australian requirements into line with prohibitions in force in comparable markets and follows the commencement on 29 March 2021 of ASIC’s product intervention order imposing conditions on CFDs offered to retail clients.
The order will remain in force for 18 months, after which it may be extended or made permanent. Civil and criminal penalties apply to contraventions of the product intervention order.