Although the Brexit process may appear to be a bit drawn out from a geopolitical point of view, we need to appreciate the fact that financial waves are already being felt within the world of binary trading. In reality, there are two main areas which will need to be taken into account in order to be prepared for what may be in store. The first factor revolves around potential regulatory changes as a result of the United Kingdom ostensibly leaving the European Union in many ways. Secondly, we need to examine how this eventuality may impact the trading strategies themselves. Let us first examine both of these concerns.
The FCA and CySEC
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When the news of the Brexit was first made public, the Cyprus Securities and Exchange Commission (CySEC) formally requested that all licensed binary options brokers within the United Kingdom provide any details in regards to how this exodus would potentially affect their trading capabilities. For example, this would be entirely applicable for those firms which currently host a considerably number of investors from outside of the United Kingdom. Furthermore, the FCA has stated that all current regulations will remain in place “until any changes are made, which will be a matter for government and British Parliament“.
However, these statements have left some traders in a bit of a quandary. It is still not yet certain how the FCA may change its rules involving binary options once the Brexit comes into fruition. One thing remains certain. The levels of transparency will increase and new cross-border compliance rules may affect the ways in which some domestic trading firms conduct business.
Slower Growth and Investment Rates
One of the most confounding aspects of the Brexit is that it will take a considerable amount of time to complete. Thus, any impacts upon the marketplace are likely to be long and drawn out. This is one of the reasons why Deutsche Bank has predicted slower economic growth and lower investment levels into the near future.
What does this mean for binary traders? It is first critical to point out that the fundamental principles of binary trading have not changed. The main takeaway point here is that investors are more likely to adopt a bearish stance and the chances are high that many will choose short-term positions. Of course, this is the primary benefit of binary trading; the time frames are quite amenable. While we could be in for a slightly tumultuous ride, it is just as likely that binary traders might be able to capitalise upon such movements if they adopt prudent and flexible strategies.
Tackling 2017 with CMC Markets
It is now more important than ever before that investors are provided with only the most reliable and flexible binary trading tools. When seconds count, there is simply no room for a second-best system. CMC Markets is one of the global online trading leaders. With advanced financial instruments, malleable platforms and a variety of underlying assets, astute investors can enjoy the potential to enjoy substantial profit margins even in these uncertain times.