Cyprus and Binary Options
This is what Cyprus Looks like on a good day
Is Cyprus on the verge of a financial crisis? This is the question on everyone’s mind and will most likely stay this way throughout the rest of this week.
Things have definitely gotten interesting over the weekend. The smallest nation in the European union struck an emergency deal on Sunday to bail out Cyprus. This $10 billion plan to rescue the small nation and its banking sector is quite large considering the size of the nation itself. A lot of people are not happy. The noticeable terms are: a one-time 6.75% tax on bank deposits of less than €100,000 and 9.9% on deposits bigger than that. What happens next is still up in the air. It’s important that you pay attention, especially if you are a binary options trader or deal with this country at all.
What does this mean exactly to the binary options industry?
This may have a huge effect on the binary options market, based on the fact, that the majority of brokers are located in Cyprus . Some companies are regulated through the CYSEC and some just run their business using minor regulation techniques. The company SpotOption is located in Cyprus and is one of the largest binary backends in the business. This situation will affect thousands of customers and clients from over 100 different brokers.
Should you head for the door and try to get all your money out? At this point it seems a bit silly to rush to conclusions. Although the banking system is in trouble, we’ve definitely seen these situations come and go in the past few years. This type of bailout is a bit different than what we’ve seen and could show a sign of a full-blown crisis or just a small one. We have to hope the traders money is safe. Assuming the money can be sent, it shouldn’t be an issue.
What about the Binary Options Brokers?
With so many brokers located in Cyprus including, 24option, Traderush, and Banc De Binary, you may want to ask your client representative about what is happening with your money. At this point, we aren’t concerned about the money located in the brokerage accounts. Will this cause delays on payments in processing, of course. This industry has been in a gray area for quite some time and does require some more regulations. Let’s make sure we get all the facts before we jump to conclusions. It’s important not to panic. Remember, the brokers aren’t in trouble here, it’s the banking system. If anything, the banks need the money generated by these binary brokers .
Owner and CEO of Banc De Binary, Oren Laurent has come out and said that all money is safe with them and that all new fees that will be processed by this tax bailout will not be passed on to the customer. Even though this will be a huge cost to the brokerage, they don’t feel like it’s a good idea to affect the clients. Assuming other brokers follow suit, this should show some positive news for the binary options brokers.
We will try to do our best to get more information about this situation this week. We will continue trading as normal until we hear differently. If you have any questions or comments you can leave them below. We’ll do our best to get back to you as soon as possible.
Something to look at as a trader, is the EURUSD has gaped down over 170 pips on Sunday night. The market closed on Friday at 1.3074 and its currently at 1.29000. The purple line and whole number could be an interesting mark going forward. Keep an eye out for the gap fill tomorrow as price could try to rise back up to the close on Friday. If more bad news comes out we’ll definitely see the 1.2700’s this week. Here is a look at one of our trades when we were trading in the 1.27000 range. This should get interesting. Continue to make solid trades, but be on the lookout for anything that may change this industry.
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