The online trading market has seen tremendous growth both in terms of usage and growth in the last decade. Currently, it accounts for a significant share of trading volume when it comes to global trading. Due to the growth of internet services and technology, India is home to a sizable number of the world’s online traders, with Binary Options being a favorite among many.
However, due to a lack of awareness regarding online trading, the majority of India’s populace is still ignorant when it comes to what Binary Options trading is. A common question concerning the legality of Binary Options trading in India is also doing the rounds, which is the main focus of this article.
What is Binary Options Trading?
Binary Options trading refers to a form of an “all or nothing: trading option’’. Here, the payment consists of either a fixed compensation when the option expires “in money”, or absolutely nothing when the option expires, “out of the money”. Therefore, in simplest terms, Binary Options involves a “yes or no” probability, hence the term binary. Option Holders do not have the choice to sell or purchase the asset, as the entire trading process is automatic.
In India, there are several traders focusing on making money from binary options trading. It should be noted that binary options trading requires specific software platforms such as IQ Options, which requires a high degree of risk management for the trader. Due to the nature of Binary Options however, the loss of a trader is limited to the amount risked at the beginning of the binary trade.
Is Binary Options Trading Legal in India?
As mentioned before, many traders still question the legal status of binary options trading in India. As per the guidelines laid out by the Reserve Bank of India, any form of online trading involving foreign exchange, such as Binary Options trading, is declared illegal.
The Indian financial sector is mainly regulated by the Securities and Exchange Board of India or SEBI, which does not favor binary options trading in India. The Foreign Exchange and Management Act or FEMA, clearly states that any form of binary options trading or Forex trading through online or electronic portals is outlawed. Furthermore, it has also declared that investors taking up binary options trading in India can do so at his/her own risk. The risk factor is present as there are no existing laws that regulate the dealings of binary options brokers.
How can one Trade Binary Options in India?
It is common knowledge that there are no India based binary trading firms that offer binary options trading to clients. Additionally, no recognized stock exchanges in India include Binary Options trading in their list.
To past this and to begin investing in binary options trading, Indian citizens can sign-up with an offshore broker for binary options. A good example is IQ Option, which is a regulated Cyprus based online trading platform.
Legal Status of IQ Option in India
IQ Option is part of IQ Option Europe Ltd, a Cyprus based company which is regulated by the Cyprus Securities and Exchange Commission or CySec. Since it is regulated by an international regulatory body, it adheres to strict rules and regulations which are aimed at keeping their trader’s funds safe. Since Binary Options is declared illegal in India, IQ Option does not have a legal status according to Indian Laws.
Indian Traders mainly use three different kinds of accounts when starting to trade with IQ Option. This includes,
- Demo Account: This account is a free one that gives traders the opportunity to practice binary trading using virtual money.
- Standard Account: This account has the lowest minimum deposit amount
- VIP Account: Consists of a personal manager aimed at helping the investor with trading advice.
How to Start Trading with IQ Options?
As mentioned before, IQ Option is a reputed broker, offering a mix of numerous tradable assets as well as different asset classes. This includes CFDs for stocks, cryptocurrencies, and commodities, along with digital options and binary options trading.
Some of the salient features of this platform include
- Low minimum initial deposit requirement
- Free lifetime Demo-Account
- Regulated by Cysec
- Direct Access to cryptocurrency markets
- Secure account verification
- Cutting-edge user-friendly platform
For information on how to open an account and start binary options trading with IQ Option, traders can visit https://www.iqoptionmag.com/ for more in-depth information.