The binary options trading, which is still largely unregulated but is growing in popularity, is often plagued by reports of fraud, especially in the form of unscrupulous brokers who rip unsuspecting traders of their funds. That being said, the much more lucrative and well established forex trading market, which comes with a much tougher set of checks and balances, rules and strict regulatory authorities is obviously not immune to scandal and manipulation either.
The latest forex fixing scandal which began evolving in late 2013, or at least hitting international headlines then, is yet another proof that were money making and human beings are involved, no procedure can be bullet proof, and processes are vulnerable to interference and manipulation.
The suspected manipulation of the key foreign exchange rates on a global scale has raised the heat on the biggest banking institutions, as it appears that literally hundreds of traders, employed by these banks are implicated in this scandal.
The total value of funds, derivatives and financial products traded on a daily basis, reaches the astronomic amount of approximately 5 trillion USD, rendering the currency market the largest in the financial system. The forex market can said to be largely shaped and dominated by the two largest forex dealing banks, namely Deutsche Bank and Citi, which together account for a whopping 30% of the total turnover of the forex market.
It therefore comes as no surprise to note that these two banks are reported to have recently spent millions in an effort to help the regulatory authorities in the US, the UK, Switzerland and elsewhere to conduct thorough investigations into the allegations for forex rate rigging. The fact that these two banks have also suspended significant numbers of traders from their employees, also comes to confirm that almost always where there is smoke, there is fire.
Because suspicions seem to concentrate on the scenario that the manipulation of foreign exchange rates was conducted by traders through electronic chatrooms, both Deutsche Bank and Citi as well as JPMorgan, UBS, and Goldman Sachs have all banned electronic chatroom activities for all their employees.
Financial institutions and regulatory authorities are currently on a crusade to track down all evidence of wrongdoing and substantiate the allegations for attempts to fix, rig or manipulate the foreign exchange rates. As information keeps coming in that further indications of more cases of forex market manipulation are being found, we here at binaryoptionswire.com have only one thing to say: keep trading, whether forex or binary options, but never take things for granted or at face value, and always trade with knowledge and caution.
George Milios is the founder of onlineforextrading.net, the binary options and forex news portal which is dedicated to providing you with all the information you need to successfully trade.