Binary options broker Magnum Options, aka Hampshire Capital Ventures Ltd., operates in Australia without having the proper authorization, the Australian Securities and Investments Commission (ASIC) said through its consumer website MoneySmart.gov.au.
The broker provides two different UK addresses, the Australian regulator noted. On its website, www.magnumoptions.eu, the broker provides customer support phones in the UK, and in North America (Canada). The broker provides no information about regulation or authorization.
Magmum Options offers trading in several types of binary options, both short-term and long-term, on currencies, commodities, stocks, and indices. It also works with affiliate partners (RushBucks).
Magnum Options has also been included in the warning lists of several other regulatory bodies – Bulgaria’s Financial Supervision Commission (FSC) and Canada’s Nova Scotia Securities Commission (NSSC), Manitoba Securities Commission (MSC), and British Columbia Securities Commission (BCSC).
Although binary options trading services are not illegal in any of these countries, it is allowed only to restricted and authorized entities.
In binary options trading, investors guess whether the price of a certain instrument would go upwards or downwards within a pre-determined time frame. Once the time is up, the option is deemed expired and the bet is settled. Depending on the outcome, a trader either collects a profit, or loses money. This is a very controversial instrument and an increasing number of countries, especially in Europe, are taking steps to ban it due to its risky nature.
In Australia, investors lost $3.0 million in total to binary options scams in the first nine months of 2016, according to the latest relevant data provided by the ASIC. At the time, the regulator referred to binary options as being speculative and risky and warned that there are groups of scammers who use binary options to lure investors into making money through asset price movement and steal their money.
When engaging with unauthorized and non-regulated brokers, traders are putting their investments at higher risk. We strongly advise you to only deal with regulated forex brokers, authorized by reputable regulatory bodies like CySec, FCA, and CFTC/NFA, among others.