The Securities and Exchange Board of IndiaĮstablished in 1988, SEBI acts as the regulator for the Indian securities markets. Another key function of the RBI is the management of exchange control specifically the outflow of Indian rupees out of the country to facilitate trade payments and also to maintain the stability of the forex market in India.Ĭonnect with an expert lawyer for your legal issue It also acts as a regulator and supervisor of India’s financial industry, particularly the banking sector. The RBI is India’s Central Bank and plays a vital role in implementing the monetary policies of India. In India, the main regulatory bodies which are in charge of regulating the financial industry are the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI). To have a better understanding of the regulatory issues surrounding online binary trading, let us examine in more detail the financial industry’s regulatory landscape. Due to the lack of locally regulated brokerage firms, many traders in India have resorted to dealing with offshore brokers, some of which are regulated and others unregulated. Unlike forex trading in India which is tightly regulated by the Securities and Exchange Board of India, there are no equivalent legal restrictions imposed on Indian's trading binaries. While hotly debated among the Indian online trading community as to whether it is illegal to trade binary options in India, technically speaking the answer is a simple “No”.
A binary option automatically exercises, meaning the gain or loss on the trade is automatically credited or debited to the participating parties' accounts when the option expires.Ĭonsult: Top Corporate Lawyers in India Is Binary Trading Legal in India?
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Conversely, the seller of the option will either retain the buyer's premium or be required to make the full payout. That means the buyer of a binary option will either receive a payout or lose their entire investment in the trade-there is nothing in between. At the time of expiry, the price of the underlying asset must be on the correct side of the strike price (based on the trade taken) for the trader to make a profit.Ī binary option automatically exercises, meaning the gain or loss on the trade is automatically credited or debited to the trader's account when the option expires. Binary options depend on the outcome of a "yes or no" proposition, hence the name "binary." Binary options have an expiry date and/or time. Let’s have a look into the basic question about the legal aspect of the Binary Option in India.Ĭonnect with an expert lawyer for your legal issue What is Binary Trading or Binary Options Trading?Ī binary option is a financial product where the parties involved in the transaction are assigned one of two outcomes based on whether the option expires in the money. This situation becomes ambiguous after the restrictions on forex trading by the Reserve Bank of India. People take it as an exceptional way of making money with their regular jobs and businesses. And if we consider India specifically, the scenario is almost the same. This has the potential to improve their living standards. It is a blessing for the people of developing and underdeveloped countries for finding another way of income. In recent times, binary options trading is getting popular very quickly.
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