NSE to investors: Refrain from dealing in unregulated derivative products
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The National Stock Exchange has advised investors to refrain from dealing in unregulated products such as 'Contracts for Difference' and 'Binary Options' offered by unregulated online trading platforms
In a statement, the exchange said that it has noticed some unregulated platforms and websites offering trading in certain unregulated derivative products called 'Contracts for Difference' (CFD) and Binary Options.
t noted that investors falling prey to the promises of exorbitant returns by these websites and platforms may eventually lose money heavily.
"Hence, Investors are advised to refrain from dealing/investing in unregulated products such as Contracts for Difference (CFDs) / Binary Options offered by such unregulated Internet-based trading platforms," it said.
A contract for differences (CFD) is an arrangement made in financial derivatives trading where the differences in the settlement between the open and closing trade prices are cash-settled. There is no delivery of physical goods or securities with CFDs.
A binary option is a type of options contract in which the payout depends entirely on the outcome of a yes/no proposition and typically relates to whether the price of a particular asset will rise above or fall below a specified amount.
