11/20/2015 by Ryan Herron Joaquin Trading
Binary Options ‘Bucket Shops’ are shutting down one by one because regulated exchanges such as Cantor Exchange are offering a much better trading environment.
The term ‘bucket shop’ comes from a practice of the late 1800s when people thought they were trading but no trades actually took place. Bucket shop owners would manipulate prices, ‘throw the trading tickets into the bucket’, and choose who they wanted to win that day. It didn’t matter as long as the proprietor made money. It was a total sham and the government finally shut this practice down. In some countries around the world, this practice is still going on but governments are again starting to step in.
Since 2008, unsuspecting traders have been getting deceived by shady marketers posing as binary options ‘brokers’. These traders would see advertisements, usually involving a sports car and stacks of cash, about how they would become millionaires overnight if they would only deposit funds into XYZ binary Options ‘firm’.
Horror stories abounded; Traders could not withdraw funds; They were manipulated into illegal activities; Fraudulent ‘price spikes’ would happen at the last possible second; These shops would close down and be gone forever…along with client funds; Harassing phone calls to get you to deposit money; Disconnected phones when you want your money; Unrealistic promises of untold wealth. These frauds are called ‘bucket shops’ because the so-called ‘trades’ in these businesses are never executed on any exchange whatsoever. Traders are fed up and governments are as well.
The governments of many countries are cracking down on these illegal binary option scams:
- France has even listed over 200 of these ‘bucket shops’ on a black list.
- FINRA says, “Firms claiming to be binary options trading firms do not deposit investor funds into the investor’s account, deny requests to return funds, or require a fee be paid in order to receive a return of their investment assets.”
- The OSC states, “Many of these websites are trying to lure investors by making untrue and/or misleading statements about Canadian securities regulators’ oversight of binary options.”
- The CFTC expresses, “Much of the binary options market are not necessarily complying with applicable U.S. regulatory requirements and may be engaging in illegal activity.”
- Regulators from Japan, Australia, U.K., Israel, Hong Kong, among others are all continuing to blacklist and shut down these binary option frauds.-source
There is light at the end of the trading tunnel! Cantor Exchange is leading the pack!
One difference in an ‘unregulated broker’ and a CFTC regulated exchange is the fact that exchange offers the same account protection you would have by trading on the NYSE or Nasdaq. With an exchange, you are trading against other traders and not just a business that resembles a casino. Trading exchanges are there to facilitate trades; NOT to trade against you. Currently Cantor Exchange, North American Derivatives Exchange, and Chicago Mercantile Exchange offers CFTC regulated binary options. My preference is Cantor Exchange due to their ability to work with any firm and any technology.
Cantor Exchange, which is owned by Cantor Fitzgerald, is making waves through the binary options community. Strike liquidity has increased 1,100% over the past 7 months. Put/Call spread ratios have tightened from around 40 points to about 10-12 points on average and are still shrinking. Daily contracts traded have also picked up steam from about 20-30 contracts per day to several thousand per day, at the present.
As far as Cantor Exchange is concerned, traders seem happy with their offerings because:
- Trading education companies are stepping up such as cxmarkets.com.
- Probability Indicators have already been created by Joaquin Trading.
- SpotOption, Tradologic and other technology companies are continuing to create platforms.
- Referring partners such as Forest Park BX are helping supply and demand.
- One company is working on trading automation.
- Another company is working on proprietary charting solutions.
- YouTube tutorials are being uploaded about the exchange.
- Chat groups and message boards are buzzing about this new potential.
- Deals are being struck to offer tools and services for traders in this market.
- A book entitled ‘Trading Barefoot’ is even being released next week about regulated binaries.
What are traders and market professionals saying about Cantor Exchange?
- Ryan Herron of Joaquin Trading says this, “$1 contracts and the ability to write my own strike is appealing. Trading in and out of multiple strikes, at the same time, is very attainable for the retail trader.”
- Zachary Hogan from Traden Group says, “Cantor Exchange is certainly exceeding my expectations and the level of transparency is amazing. Their support teams are very insightful and the pricing (fees) are very fair.”
- Richard Jaycobs, President of Cantor Exchange says this, “ Our mission is to provide the fairest possible marketplace for binary options trading.” –source
One thing is for sure; The days of the illegal bucket shops are numbered.