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Is "binary options trading" legitimate and legal? I came across binary options trading, also called digital options, the other day. It's billed as options trading, but what it seems to boil down to is a "bet" as to whether the stock price of the underlying asset or commodity will be above or below the price at the time the option/bet is placed. There's not much mention of any contract or anything, or a chance to buy the underlying asset. So my question is, is this legitimate and legal, or is it just another form of online gambling? If it is just online gambling, is it legal in the U.S.? Below are some websites that offer binary options trading. 3 of them show an address in Cyprus. The fourth, eztrader.com, doesn't show an address but seems to be based somewhere in Europe. The websites are: www.anyoption.com www.tradesmarter.com www.tradologic.com www.eztrader.com Thanks, T
State/Country relating to Question: Texas Already Tried: First try.
This is an another form of gambling, since the "payoff" remains based on chance rather then on service. That is why most are based out of Cyprus, where the rules of gambling are both mostly non-existent and unenforced. If the site would be licensed in the USA, then it would have to be registered under US law and US rules for online gambling. Sincerely, Dimitry Alexander Kaplun, Esq.
So, if I'm in Texas and trade an option (place a bet) with a site in Cyprus, would that be in violation of any laws here in the U.S.?
I haven't done this, and don't know that I would, I just want to get it straight in my head.
Thanks.
There is no federal ban against gambling online; there are, however bans against running an online casino or bookmaking site. Texas does classify gambling as a class C misdemeanor. Here is the statute for you to review: § 47.02. Gambling (a) A person commits an offense if he: (1) makes a bet on the partial or final result of a game or contest or on the performance of a participant in a game or contest; (2) makes a bet on the result of any political nomination, appointment, or election or on the degree of success of any nominee, appointee, or candidate; or (3) plays and bets for money or other thing of value at any game played with cards, dice, balls, or any other gambling device. (b) It is a defense to prosecution under this section that: (1) the actor engaged in gambling in a private place; (2) no person received any economic benefit other than personal winnings; and (3) except for the advantage of skill or luck, the risks of losing and the chances of winning were the same for all participants. (c) It is a defense to prosecution under this section that the actor reasonably believed that the conduct: (1) was permitted under Chapter 2001, Occupations Code; (2) was permitted under Chapter 2002, Occupations Code; (3) consisted entirely of participation in the state lottery authorized by the State Lottery Act (Chapter 466, Government Code); (4) was permitted under the Texas Racing Act (Article 179e, Vernon's Texas Civil Statutes); or (5) consisted entirely of participation in a drawing for the opportunity to participate in a hunting, fishing, or other recreational event conducted by the Parks and Wildlife Department. (d) An offense under this section is a Class C misdemeanor. (e) It is a defense to prosecution under this section that a person played for something of value other than money using an electronic, electromechanical, or mechanical contrivance excluded from the definition of "gambling device" under Section 47.01(4)(B). Sincerely, Dimitry Alexander Kaplun, Esq.
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