High risk financial products are being offered to private investors on an ever increasing basis, including in particular “binary options” and “contracts for difference” (CFDs). The apparent trading of foreign currencies is increasingly being offered as “FX Trading” or “Rolling Spot Forex Contracts”. Such products are advertised using a range of aggressive sales practices, and are frequently sold to private investors without any pre-sales investment advice. The FMA warns consumers to exercise the utmost caution in relation to such products.
The FMA Focus on Binary Options and Contracts for Difference explains how these products work, and the risks entailed.