GUILTY Case# 2016-166 | hailg vs 24option.com

[hailg]

Hi everybody,

Just an update from me. So I went to the lawyer for my case and 2 weeks ago I DID get back some money. Not sure if I can expose the amount here but it's worth the time and the lawyer fee. So any of you that was in my situation, please do contact joanna.bailey@giambronelaw.com.

 

[hailg]

I have a similar experience with this company, I lost an amount several times the size as the person who started this thread. I do not see any chance of getting it back. These guys will convince you that the mistakes made in webinars were an anomaly and never happened before, and that they can be recovered, but all they want is for you to deposit more and trade more. Binary Options are not linked to liquidity providers like forex, they are pure administrative transactions on the balance sheet of the broker, like a casino, the winners wins are paid for by the losers losses. The company is credited with 100% of every lost trade, and pays out 61-88% of winning trades to the winners, which means they make at least 39-22% of every single trade net. You can bet your account manager makes 10% of every 'trade', won or lost.

As someone earlier said, if you use these guys, do it placing your own trades using your own skills, then you have nobody to blame.

Read up on 'Martingale system' - it is the gambling strategy which requires doubling your bet to win the next spin of the roulette wheel. This company's 'risk management' is to tell its customers to use the Martingale system (worse than martingale because you need more than double to keep doubling up) - In the end it is a zero sum game, you can win 100 times, but all you need to do is lose one run, and your loss equals the size of your initial stake and all your wins.

HI Roger, please see my prev post. Do contact the lawyer if possible. Hope this can help you.

 

[ruseneca]

There is no LP for binaries. What LP will pay a broker 85% of a wager on success and collect 100% of a wager on failure, when success and failure could be 1/10 pip or 10,000 pips. All trades are handled in house, just like a casino. The difference is that licensed casinos let players cash in their chips.

What binaries have is nothing more than a price feed, and most are more than capable and willing to manipulate that price feed in whatever way suits them.

Actually, @Pharaoh LPs just deliver the price feed and the available volume for the corresponding price! For them, it doesn't matter with what type of financial company they do business.
The difference is how financial companies interpret this information and how they had chosen to profit from markets. This is one business activity that regulators strictly oversight. Or at least they are supposed to oversight.
My experience with CySEC and Cypriot Financial Ombudsman shows the opposite. These people are sooo inexperienced.
BOs are also allowed to hedge, so if you buy an option they are allowed to sell on the real market if they find it reasonable. This is why people who work with such companies must have obtained a license for broker/dealer and the rest of company's staff must be highly trained.
Anyway, I believe that 24option does not meet any of the above-stated arguments.

 

[Pharaoh]

I think there's some confusion here. I can buy a price feed from a major news service (or from an instant "become a binary broker" service). This is solely a price feed and is not tied to any liquidity. Therefor, it doesn't qualify as an LP.

A "true" LP may offer price feeds as a separate item, but in order to be categorized as an LP, they have to be willing and able to take the opposite sides of trades. In some cases, this is done on a per-trade bases (STP/ECN) and in other cases brokers can hedge theiur net position against one or more LPs every so often (check minimum times to have trades outlawed as "illegal scalping" for a good idea how often such a broker passes trades up to an LP).

Although CFD brokers in the UK keep trades in house by default, if they have an LP, they may pass at least some of the risk off, especially for trades held over weekends.

The difference between a CFD broker and a binary broker is that if price moves 1/10th of a pip on a full lot of a USD based pair, the CFD broker (just like an ECN broker or LP) sees this as $1 gain or loss on the position and a 1000 pip move as $10,000 of gain or loss on the position. For a $100 binary wager, 1/10 pip or 1000 pips in the client's favor is in the range of $65-85 for the client and 1/10 or 1000 pips against the client is a loss of $100 to the client. This divorce of the magnitude of price movements from the payouts renders any normal method of being a true LP impossible. A licensed casino would have a better chance of finding a bank to act as an LP and take the other side of clients betting red or black on roulette spins.

So, even if a binary company gets its prices from a bank or other LP, the binary broker is only getting a price feed. No entity is acting in the position of hedging the broker. All profits and losses are purely in-house. Therefor, I stick to my statement that binary options brokers do not have LPs.

 

[ruseneca]

Well said, @Pharaoh! If 24option is regulated, then they will be obliged to operate with a LP, else they can simply apply for a price feed which will be used for comparison on whether an option is a win or loss.
Whether such LPs exist, it's your point of view.