New Delhi: The leading NSE Stock Exchange has asked investors to refrain from investing in non-regulated derivative products such as contracts for binary differences and options offered by the Internet-based trading platform.
In a statement, the exchange said that investors fell prey promises of high refunds or exorbitant by this trade platform could ultimately lose money.
Thus, investors have been advised to refrain from dealing or investing in these products, he added.
Developments come after the exchange of paying attention to several platforms or websites that are not arranged or offered to trade on certain derivative products that are not regulated called contracts for differences (CFD) or binary options.
CFD, in market language, refers to contracts between buyers and sellers who determine that the buyer will pay the seller the difference between the value of the asset and its value at the time of the contract.
This allows traders and investors the opportunity to benefit from price movements without having the underlying assets.
Binary options are the type of option with fixed payments where an investor predicts the results of two possible results.
If predictions are correct, investors receive agreed payments.
If not, investors lose initial bets.
This is called ‘binary’ because there are only two results – win or lose.