Australia is home to some of the world’s largest cities, including Sydney and Melbourne. The country also has one of the highest GDPs globally due to its positioning as a centre for international trade, tourism, and banking.
Money runs through Australia, and the stock market
There are plenty of opportunities for people to try their hand at investing in hopes of getting rich quickly or at least making enough money to live comfortably. Common investments are shares (stocks) in companies solidified by actual legal documents, bonds issued by city governments or major corporations.
Mutual funds that payout when specific criteria are met (a fund run solely on company stock will be particularly lucrative when the companies in which it is invested are doing well) are also popular. Lastly, derivatives provide returns based on other investments (for example, an investment in futures means betting that the price of a commodity like corn or oil will rise).
You can trade real currencies against one another through a forex broker. These brokers exchange real-world currencies for a fee and make their money by charging this fee. The problem with trading currencies is that there must always be someone else who wants to buy what you’re selling and vice versa, meaning that deal ends up going nowhere sometimes.
This makes it extremely easy to quickly lose all your potential gains from a large trade if you don’t know what you’re doing. To get around this, forex brokers—online or otherwise—buy and sell not real currencies but their derivatives. These are simply contracts that allow you to bet on the rise or fall of a currency pair but don’t require the input of an actual currency.
This is where some problems can arise. Without legal frameworks governing trade in these more abstract options, some less-than-scrupulous brokers have decided to take advantage of their customers by buying back derivative contracts for higher prices than they were initially sold at. Another issue is that many countries have explicit laws against gambling, so trading with forex brokers based worldwide might be technically illegal depending on the situation.
Are forex brokers legal in Australia?
The quick answer is yes, but that might not be the entire story. Whether or not you’re breaking laws when trading with forex brokers is dependent on the country in which you live and your legal standing within it, so it’s essential to get advice from an expert if you have questions about whether what you’re doing is allowed where you are.
For example, Australian currency cannot be traded against currency outside of Australia through forex brokers – which means no buying or selling bitcoins or any other currency for that matter. You can use only real currencies in transactions between brokers and customers.
Malaysia has no laws prohibiting gambling, allowing people to take full advantage of international options provided by reputable forex brokers. It also doesn’t require licences for online trading. That doesn’t mean that everyone is operating legally. Always make sure you know the laws in your country before trading with forex brokers!
The US has its take on trading currency through online options, which is to say that it’s illegal in most states. Forex brokers are bound by American laws, meaning they can’t buy or sell currency outside of the United States in an attempt to avoid legal issues. Certain companies have taken advantage of this loophole by creating websites specifically for Australian consumers in California. Anyone who uses these companies for foreign currency trading may be at risk of violating local or international law without even knowing it.
To stay safe when making trades using forex broker services, always check to see whether they’re licensed, registered and legal where they say they are. Ask about restrictions on trading—some brokers can’t change your money to another currency unless you give them ID or proof of address.