The Monetary Authority of Singapore has issued a warning to investors about the trading of binary options with unregulated platforms, having been prompted to do so by an increase in the number of complaints from investors who have suffered financial losses.

A binary option is a type of option contract whose underlying instrument might be a stock, a commodity, a currency or an interest rate. Unregulated platform providers often use marketing catchphrases such as “trading with zero risk,” “trading amounts of as little as $1”, and “profit payout of 500% per trade,” to entice investors to invest.

Contrary to promises of low investment risks with exceptionally high returns, binary options are in fact speculative and risky investment instruments. There is a high chance of the investor losing his entire investment, even if he deals with a regulated entity.

The regulator is especially worried about fraudulent unregulated binary options trading platforms located beyond its reach. It points investors to the MAS Financial Institutions Directory, through which they can check to see the broker's regulated status, plus the MAS Investor Alert List.

There are hundreds of binary options brokers online at the moment. Every day, thousands of traders are trying to get relevant and objective information about binary options brokers, before they decide to deposit their money with them. One website that was set up to give investors objective information and reviews about binary options brokers is www.fairbinaryoptions.com/brokers/