Tradologic, a cutting-edge FX options platform provider, has recently announced it is currently in talks with several European financial regulatory bodies to create a new regulated FX options exchange called BinarEx.
BinarEx aims to bring more transparency between investors and brokers, and to put the FX options industry in a more positive light. This news comes after a mount of complaints from Belgium traders prompted the FMSA to order a complete ban on CFD’s, Forex and FX options trading products in the country.
Tradologic’s BinarEx will operate under an exchange-traded model, rather than the traditional market-maker model which has resulted in distrust from traders and problems for financial regulators.
Through exchange-traded FX options, traders are able to obtain more reliable quotes, better prices and, in the end, superior returns. This is possible due to the fact that exchange-traded platforms match traders against each other, where both mutually agree on the bid and asking price, and at the expiration time the winning trader reaps the profits of the loser. The broker then takes a commission from both sides for facilitating the trade, so the broker makes money regardless of the trade’s outcome or bet size.
This type of trading revolves around straight-through processing (STP) execution, where each trader goes through the over-the-counter foreign exchange market. Tradologic aims to bridge the gaps between traders, brokers, and transparency. BinarEx will be similar to Nadex, a popular FX options broker who is regulated and monitored by the U.S. Commodity Futures Trading Commission (CFTC).
Michael Golod, CEO of Tradologic, recently stated: “I see BinarEx as a sustainable business model that ensures fair and transparent terms for all parties involved. We are already in talks with several EU and non-EU financial regulators and the feedback we’ve received tells me we can expect a much friendlier regulatory environment.”
Any brokers success through exchange trading is dependent on the market’s liquidity. With low volume, trades may not be matched, deals may not be made, and the number of value trades may be few to none. But with a large and trusted company like Tradologic, liquidity will likely be high, allowing traders plenty of opportunities to find the deals they want.
Tradologic will be releasing BinarEx at the Finance Magnates London Summit on November 14-15, 2016.