Warning Nova Scotians about binary options

The Nova Scotia Securities Commission has noticed an increase in solicitations and marketing for investment in binary options (also called “fixed-return options”). 

At this time, no binary options trading companies are registered in Canada. These platforms may be engaging in illegal activity.  

  • Investing in binary options is intended for sophisticated investors who have the knowledge, time and resources to track, analyze and assess each individual investment. People thinking about investing in binary options should exercise extreme caution.

  •  Binary options are like an “all or nothing” wager.  You bet that an asset (currency, shares, etc.) will rise or fall in value within a specific amount of time, sometimes as limited as a few minutes. At the expiry of that time, you either profit a pre-  determined amount or you lose 100% of your initial investment. 
  • The market is complex and difficult to predict. Effective market analysis requires experience and education - it is not guesswork.

  • Anyone asking for money for investments must be registered with the Nova Scotia Securities Commission and authorized to sell you the investments being offered.  The Nova Scotia Securities Commission and other Canadian securities regulators will only register companies and individuals that meet specific qualifications and standards.

  • Some offshore companies offering binary options in Canada have said that either their business or the specific sale or transaction is not regulated in Canada.  This is not true.  Binary options are an investment.  The offer and sale of investments to Nova Scotia residents, whether online or in person, is regulated by the Nova Scotia Securities Commission. 

  • Much of the binary options market operates through Internet-based trading platforms that do not meet current Canadian regulatory requirements, such as being registered to trade investments.    At this time, no binary options trading companies are registered in Canada. These platforms may be engaging in illegal activity.  

  •  Advertisements for binary options are appearing more regularly on social media sites.  Also, Nova Scotians are being cold-called at home and being asked to provide credit card and personal information in order to open an account.  The pitch often involves software that automatically trades for you supposedly resulting in easy profits.

  •  Investing with offshore companies operating outside of Canada is risky and is a common red flag of investment fraud.  Once offshore, it is often impossible for investors to recover their money. 

Before you invest:

  •   Check the registration of any person or company offering investments to Canadians.

  •  Check the disciplined persons and companies list to see if there have been any enforcement actions taken against the person or company.

  •  Be cautious of giving out personal information (including credit card information) over the phone or Internet.

  • Do not make an investment decision on the spot. Take the time you need to research the opportunity and review it with an independent and registered financial advisor.

  • Ask to have written information about the investment sent to you.

For additional information we recommend reading the CSA's Binary Options Brochure

Contact the Nova Scotia Securities Commission if you have questions, want to make a complaint or to report a scam.