There are many types of gambling that helps fuel the economy in the Caribbean. Our casinos help attract tourist to our resorts and provide extra taxable income our islands. Many islands such as curacao also generates a lot of income by licensing online casinos. If we want to keep this income and make it grow even further in the future we need to look for new and exciting games that we can bring to our casinos and online gambling operations. We can not succeed if we do not develop as fast as the business does. If we do not we will see Cyprus, Malta and other destinations take an increasing part of our gambling income. With this in mind we are going to take a special look at financial gambling and binary options.
What are binary options
Binary options are essentially way to gamble on the stock market, on currencies, on indices and a number of other things. The option allows the buyer to bet on whether the underlying financial instrument will go up our down during the maturity of the binary option. If they correctly predict the market movement they will “win” and make 60-90% on their money. If they are incorrect they have lost the money they used to buy the option. It can be compared to betting on black or red in roulette but offer the house a potentially larger edge. Binary options were originally provided in online casinos but in later years Cyprus and other markets have started to offer special licenses for the trade in which they are described as financial instruments.
Why to people trade binary options?
There are many reasons why people find binary options interesting. Our analysis says that the most important are.
- People are attracted to the potential of quick money.
- People are fooled into believing they can earn a lot of money by skillfully predicting the future of the market. This is not entirely false. There are people who will be able to earn money while trading with binary options. The truth is however that the wast majority of traders will loose money. This is what allow the brokers to make money and pay those who make money. It is in many ways very similar to sports betting.
- People think they are smarter than other traders and assume they are going to earn money even if others don’t. aktiemäklare.com (A Swedish websites) published an interesting study that show that successful investors are more likely to try binary options than people that are less educated about investments. This is due to the fact that they are successfully trading with stocks and believe they can supercharge their profits by using binary options. They are often willing to invest large sums of money.
- The fact that they are regulated as financial instruments gives them an air of respectability and make them seem like more than they really are. A way to gamble on market movements that provides the broker with an edge. This is further re-enforced by the fact that some stock broker offer trade with binary options.
Are binary options a scam?
It is easy to understand why some people feel like binary options are a scam. That is however not really a fair statement. A scam indicates that something are sold as something else then what it really is. This is not really the case. Most binary option traders are very open with what they offer and provide detailed guides to exactly how binary options work. The fact that people trade with them without reading the instructions or that they over estimate their capabilities does not make binary options a scam. This is true in the same way that sports betting isn’t a scam.
This does not mean that people does not get scammed into investing in binary options by financial advisors, affiliate website or well meaning friends. However this not make binary options a scam and everyone should run from any financial advisor that promise high risk free returns. And no one should ever use a financial advisor that is not a fiduciary. Only fiduciaries have to look to your best interest. Other advisor can sell you any crap that they make money from.
We should also be open with the fact that there have been a few rough brokers that have operated scam operations within the binary option field. This is true just like there have been some scam casinos. Rough brokers have refused to pay out earning and balances and have in some cases even edited options after they where purchased to make sure that they mature out of the money. These are despicable behaviors and something we need to crack down hard upon if we want to establish a larger Caribbean presence within the binary option industry.
What opportunities do Binary options offer the Caribbean?
Binary options are a quickly growing industry and it can not be doubted that they still offer large opportunities for new companies to enter the market. We see a limit upside to allowing the trade of binary options in our casino even though super short binary options potentially could be turned into an exciting live game. There are however large opportunities for the curacao gaming commission and and other regulatory bodies to make money from the developing of a licensing frame work for binary options. We do believe that this is best done by a body separated from the gambling commission. This to keep the illusion that these are financial instruments and not games of chance,