Yes it is a form of gambling and it is set-up to favor the house and the "investor" will only loose money on such trades in the long-term. On average, at the very best a winning trade pays you 90%, but in a losing trade you loose 100%. I would advise against it. On top of that there are too many online scammers in this field, many headquartered in Cyprus, a country with the weakest financial regulations and virtually non-existent consumer protection.
Yes, binary or 'fixed-odds' options are quite clearly a form of gambling. The whole sector was savaged in Forbes a few years ago as little more than 'a financial crap-shoot,' as demonstrated with the following example (given the typical scenario set up by brokers):
A web site pays $71 for each successful $100 “trade.” If you lose, you get back $15. Let’s say you make 1,000 “trades” and win 545 of them. Your profit is $38,695. But your 455 losses will cost you $38,675. In other words, you must win 54.5% of the time just to break even.
This actually leaves out the implicit transaction costs between the strike prices on either side of the option. These alone can wipe out any marginal gains.
However, binary options trading is not widely regulated as a form of gambling. Consequently it is technically legal to purchase these options in the countries you mention, provided you do not buy them via a gambling operator (which are starting to incorporate binary trading platforms).
I'm not sure if it's dome in Pakistan , India and Nigeria but I know that it is mostly done from Cyprus which is one of the most corrupt countries of the world. My friend had a binary options broker from Cyprus and even though he had some good basic info about this stuff from tutorials and DVD's like http://amzn.to/1ynhZSe, he still lost his money after his broker turned out to be fraudulent.
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Is it allowed in other countries such as Pakistan, India, and Nigeria?
