At the time of writing, all EU membership countries have banned brokers from marketing, selling, and distributing binary options to retail traders, and Italy is no exception. The Italian measure is permanent (i.e., “until their eventual revocation” per the regulation) under Article 42 of the MiFIR regulation and Article 7‐bis of the Italian Consolidated Finance Act (TUF).
When traders in Italy use binary options, they typically do so using platforms based far away, in jurisdictions known to be very lax when it comes to trader protection. Binary options platforms that permit Italian traders despite the Italian ban prefer to be based in jurisdictions where they can operate without any serious supervision.
If you are interested in short-term speculation, there are several other instruments and products that you can use which can be obtained through brokers that are authorized to offer them in Italy and the rest of the European Union. You can for instance take a look at contracts for difference (CFDs), mini and micro futures contracts, spot forex trading, and intraday ETF trading.
This article preliminary focuses on Binary options regulation. You can learn more about binary options in general here.
The Italian retail binary options ban
The process towards the Italian ban started when the European Securities and Markets Authority (ESMA) announced a temporary EU-wide prohibition on the marketing, distribution or sale of binary options to retail investors. The prohibition, which was announced on 27 March, 2018, targeted the brokers and not the traders, as it was a consumer-protection measure. The main idea with the temporary ban was to immediately protect consumers, while giving the various EU member-states time to develop and enact their own binary options rules at the national level.
In early 2019, CONSOB launched a public consultation on making permanent a ban on retail offers of binary options. CONSOB stands for Commissione Nazionale per le Società e la Borsa, and is the Italian securities and exchange authority. It is Italy’s main financial regulator for capital markets.
On 20 June 2019, CONSOB adopted Resolutions 20975 and 20976 which:
- permanently ban the marketing, distribution or sale of binary options to retail investors in Italy or from Italy
- impose restrictions on the sale/distribution of CFDs to retail investors (leverage limits, automatic closure on margin, negative‐balance protection, banning incentives, standardized risk warnings) in Italy or from Italy.
The binary options ban came into effect on 2 July 2019, followed by the CFD restrictions on 1 August 2019.
Just like the temporary ESMA ban, the permanent Italian ban targets the binary options brokers; the ones who market, sell, and distribute binary options. The idea is not to punish retail traders. A retail trader in Italy who is purchasing a binary option online is not breaking Italian law, but is taking a big risk by engaging with a foreign broker who is accepting Italian traders despite the Italian ban.
Blocking and blacklisting
Since July 2019, when CONSOB gained expanded blocking powers, the number of websites ordered to be blocked has exceeded 1,300. On an ongoing basis, CONSOB is ordering the blacklisting of websites that offer investment or financial services in violation of Italian law. As of October 2025, it listed dozens of websites offering financial services/financial products illegally.
The enforcement shows that CONSOB is actively chasing unpermitted offerings that may try to circumvent the regime. Being placed on a “black-out” list means that Italian ISPs are ordered to block access or non-authorised investment service providers that are breaking the ban. The large number of website blocks suggests that much of the enforcement is directed at online providers and unlicensed schemes rather than solely at large regulated brokers. This is typical in high-risk digital products.
The prohibition on retail binary options marketing means that any firm marketing binary options to retail clients in Italy is in contravention of the national regime, even if no binary option has been sold or distributed yet.
Understanding binary options and why the math is not in your favor
The basic structure
The product is simple on the surface. You pick an asset, pick a binary options type (e.g. a High binary option), pick the expiration time, and pick a stake. The prediction you need to do is a clear yes-or-no prediction. If you turn out to be right, you get the predetermined payout. If you are wrong, you lose your entire stake.
In other words: you are making a yes or no wager with a capped return and a high chance of loss if the outcome misses by even a tick.
The math
A classic High binary options contract pays a fixed amount if the market finishes above the strike at expiry. The opposite is the Low binary options contract, where you get paid if the market finishes below the strike at expiry.
The stake is known upfront, the potential payout is known upfront, and the loss is limited to what you put in. The predetermined payout is typically written as a percentage of your stake, e.g. 80% payout. For most binary options, the payout is within the 60%-90% range.
If a platform is paying an eighty percent payout on a one minute EUR/USD High binary option (Call Option), the break even win rate is 55.6 percent, since losing trades drop one hundred percent of stake while winners only earn eighty percent on top of stake return.
That edge is tight even before spreads, slippage, and human error. Super-short expiries feel exciting but raise the impact of noise. Longer expiries reduce whipsaw but demand a view with more substance than a single candle pattern.
Another way to look at it is that the house edge in binaries is baked into payout. Suppose your strategy truly hits 54 percent winners. With the eighty percent payout, your expected value per trade is 0.54 times 0.8 minus 0.46 times 1.0, which is negative 0.014, or a 1.4 percent loss per trade on average. You either need a higher win rate, or you need to secure better payouts, or you need to a sufficient mix of both.
How brokers price and why payouts shift
Payouts in binaries reflect things such as implied volatility, direction imbalance from the client book, and the broker’s hedging cost. When the market is calm, payouts can look generous because the probability of a small move is lower. During a news spike, payouts often compress. If you notice a favorite asset paying seventy percent in quiet hours and sliding toward sixty percent near a data release, that is not a bug. It is the house adjusting to risk.
Risk management
With a conventional binary option, many of the standard risk-management tools are off the table. You can not put in stop-loss and take-profit orders, and you can not even decide to close a position manually if you notice clouds on the horizon. The pay out is all-or-nothing and the expiry time is fixed in advance. This means you need to work even harder with the risk management tools that are still available, such as keeping each individual stake really small in relation to the size of your total account balance. However, many traders struggle to actually stick with this risk management routine. Fixed payout products tempt over sizing because the loss looks small trade by trade. The danger shows up in streaks. A run of five to seven losses is common even with a decent edge. If each position risks five percent of account value, that streak chops a third of the balance. Keep stake per trade small. One percent is boring and that is the point. You also need to remember that short expiries magnify randomness. A reasonable plan might place the larger risk on longer expiries backed by a real setup, then use tiny size on the quick stuff. Chasing after a loss feels natural but usually digs a deeper hole.
Psychology
Binary options compress time. With a conventional High/Low binary, the only important moment is the expiry moment, and nothing else matters. This is very different from opening a stock position and gradually see the price move, knowing that you can cut your losses or take your profit at any moment if you decide to.
This compression of time into a single imperative moment pumps adrenaline in most trader brains, and short timeframes can also trick the brain into feeling close to certainty even when the setup is thin. Set rules that will help you fight the urge. A pre-trade checklist typed out will help, if you have the discpline to stick to it. Is the setup valid, is volatility normal, is news due within five minutes, is the chart aligned on two time frames, is size within plan, and so on. If any answer is no, skip.
You also need to avoid overtrading. If you lose two binaries in a row, pause for fifteen minutes and come back after a walk. No one likes this advice, and this is why so many traders end up learning it the hard and costly way instead. Save yourself that story.
The risks of using binary options platforms that permit Italian retail traders
Many platforms that still accept Italian retail traders despite the ban are based in offshore jurisdictions such as Belize, the Seychelles, Vanuatu, or Saint Vincent and the Grenadines. They want to be in jurisdiction that are known to be very permissive and where the authorities will not intervene, even though it is well known that these platforms are targeting retail traders in the European Union despite the national bans. In more strict jurisdictions, a brokerage company could run into friction if they were deliberately violating the bans of other countries, even if retail binary options wasn´t outlawed in their home country.
The fact that retail binary options platforms that accept Italian traders tend to be based in laxed jurisdictions have consequences for the Italian traders that use them. The laissez-faire approach typically includes weak trader protection laws and lax supervision, and financial services companies that misbehave rarely face any strong consequences. If you realize that your broker is manipulating price feeds, or if your account gets frozen without explanation, you will not have a strong financial authority in your corner, willing and able to open up an investigation.
Examples of common complaints:
- Price feed manipulation
- Opaque bonus terms and conditions, that causes the trader account to be blocked from withdrawal until exorbitant trading requirements have been reaches.
- “Account managers” that employ high-pressure sales tactics.
- Poorly disclosed fees and execution policies, or fees and policies that change without warning.
When you are using a platform based in a country outside the European Union, Italian authorities do not have much power at their disposal, and may not be able to offer much recourse even if you file a complaint in Italy. In cases of fraud or other criminal activity, international cooperation between law enforcement systems do exist, but many of these lax “offshore paradise” locations are known to not be very cooperative. Italian authorities cannot directly recover funds or sanction the foreign company when it is based outside the EU.
Within the European Union, retail traders that encounter an issue and can not resolve it directly with their broker, can contact the applicable financial authority directly, and follow their established resolution path. In many cases, things can be resolved at this level, instead of escalating into a full court case. Access to this type of service is often not available in lax jurisdictions, or is lacking in quality and accessibility.
Even if you manage to obtain a court ruling in your favor in a lax jurisdiction, you can run into problems when it is time to actually receive the money. Authorities can be reluctant to enforce your rights or administration can be remarkably slow. Or, it turns out the broker does not keep any assets in this jurisdiction, and you need to bring your documents to a third jurisdiction and start a new fight there to get them to honor your rights.
Alternatives to retail binary options in the European Union
If you are interested in short-term speculation, other instruments and financial products are available from authorized brokers in Italy and the other member states. If a financial service provider is authorized and supervised by the financial authority in one of the EU member states, it is automatically permitted to be active throughout the EU.
Ideally, look for products that is not all-or-nothing. You want to be able to scale in and out and use stop-loss and take-profit orders. It is also beneficial when your profit actually moves with the market, instead of being capped. With a binary option, you never get more than the predetermined amount, no matter how high or low the market moves.
Retail CFDs in Italy
A Contract for Difference (CFD) is a type of derivative financial product that allows you to speculate on price movements of an asset (such as stock, currencies exchange-rate, commodity, or index) without actually owning the underlying asset. Just as with retail binary options, your retail CFD broker is usually also your counterpart in the trade, which creates a built in conflict of interest. Picking a broker supervised by a strict financial authority becomes extra important, since this mitigates the inherent conflict.
How does a CFD work?
When you open a retail CFD position, you make a contract with your broker to exchange the difference in price of an asset between the time you open the trade and when you close it.
- If you buy (go long) and the price goes up, you earn the difference.
- If you sell (go short) and the price goes down, you earn the difference.
- If the market moves against you, you lose that difference instead, and your broker profits.
As mentioned above, there is a built-in conflict of interest between you and your broker, which makes it extra important to pick a broker that is authorized and supervised by a reputable financial authority. Since retail CFDs are legal in Italy and within the rest of the EU, finding this type of broker is not difficult for Italian traders. You depend on your broker´s honesty, solvency, and execution, so authorization is imperative.
Example of a CFD trade
Let’s say you buy 100 CFDs on Apple at €200 each. You go long, because you think the price will go up. Apple rises to €210 and you close the contracts. You gain €10 (price difference) × 100 = €1,000.
If Apple had fallen to €190 instead, before you close the contract, you would have lost €1,000.
Key features
- You never own the underlying asset (stock, currency, commodity, etc). You only have price exposure, just as with a binary option.
- CFDs track the real price movements of the underlying asset. With binary options, costs are embedded in the payout instead of being clear.
- With a CFD, your gain or loss depends on the price movement and is linear. It is not the all-or-nothing situation offered by a conventional binary option.
- With a CFD, it is easy to speculate on both rising and falling markets, without having to do any risky short-selling. In this way, it is similar to binary options.
- CFDs are leveraged products. You only put up a small portion of the trade value (margin). Using leverage magnifies both profits and losses.
- It is important to understand the overnight financing costs. If you hold a CFD overnight, you may pay (or receive) an interest adjustment.
Legal status in Italy
CFDs (Contracts for Difference) can be marketed, sold, and distributed to retail clients in Italy, if that the provider is authorized and complies with CONSOB’s permanent restrictions issued under Resolutions No. 20975 and 20976.
Examples of key retail CFD restrictions in Italy:
Leverage Limits
CONSOB’s permanent measures impose leverage caps for retail clients.
30:1 for major forex pairs
20:1 for minor forex, major indices, and gold
10:1 for other indices and commodities
5:1 for individual shares
2:1 for cryptocurrencies
Margin Close-Out / Stop-Out
Brokers must automatically close positions when margin falls below a certain threshold (on a per-account basis).
Negative Balance Protection
Retail clients cannot lose more than the funds in their account (i.e., protection against negative balances).
Ban on Incentives / Bonuses
CFD providers cannot offer incentives like cash bonuses to retail clients.
Standardized Risk Warning
Firms must use a standard risk warning in their communications / marketing to retail customers.
Micro Futures in Italy
Forex: Strategy building for Italian hours
Many Italian fx traders operate around European session times, from the open of Frankfurt and Milan through the first hours of New York. Liquidity is better, spreads are tighter, and news flow is steady. A clean framework uses two or three assets that behave differently, such as EUR USD, DAX or Euro Stoxx futures as proxied on the platform, and Brent or gold. Pick a small set of repeatable triggers. Breakout of the prior session high or low on increased momentum. Reversion to a moving average after a sharp one sided push. Reaction to scheduled news where you trade only the second move, not the first spike. Keep each rule simple enough to write in one sentence. Add a filter for time of day and a rule for skipping during low quality periods like late Friday. Log every trade with reason, time, screenshots, and a quick score from one to five on signal strength. Review on weekends. You will find that only a slice of entries pays the bills. Double down on that slice and let the rest go.
An Italy friendly ruleset keeps lunch hour liquidity and European data windows in mind. Avoid entries during the dead zone just after midday when spreads widen and random prints rise. Be extra careful around ECB and major domestic numbers where the first spike often whips back. Use time filters that exclude the first minute after a scheduled release. Prefer expiries that end on round minutes for ease of logging and review. If you trade stocks tied to Borsa Italiana hours through platform proxies, remember auction periods and how they can skew ticks. Keep a watchlist tight and familiar rather than chasing new symbols every week.
Test your strategy in demo mode
Many retail brokers offer free demo accounts filled with play-money. Instead of just randomly goofing around in this account, you can adopt a more serious mindset and use it to test your strategy. Make sure the account uses real market data, and be aware that slippage might not exist in this “perfect” simulation.
Use your demo account with the rules and budget established for your future live money account. Trade your real plan for a fixed sample size, say one hundred trades, collect stats, and only then move to small real stakes.
Education helps, but treat every course as a set of ideas to test, not a shure-fire shortcut to profits. Most wins come from boring repetition and ruthless cutting of the bad habits that creep in when you rush.
The goal is not to get lucky. It is to build repeatable behavior.
When you go live, use minimum stakes. Hold that level for another fixed sample, then adjust. No matter how well things were going in the demo account, the psychological effects of trading real money can not be simulated, and you need to adjust gradually. Feelings such as greed, fear, and the urge for revenge are common during the transition period, and many retail traders wipe out their accounts because they make emotional decisions in the heat of the moment.
Disputes, record keeping, and escalation
Things can go wrong and you might be forced to raise issues with your broker. Remember to stay factual. Capture the screen, note the device, internet connection, and time, then file a ticket through the official channel. Avoid angry back and forth in chat. Ask for the settlement source and timestamp. If the platform has a clear policy for outages and cancels, reference it by title and section, not by vague memory. If you need to escalate, follow the stated complaint steps. The more precise your notes, the faster you can move through the queue.
If things can not be resolved directly with your broker, escalate to the applicable financial authority. All the financial authorities in the European Union have complaint paths that are accessible for retail traders.
Security tips
- Two factor authentication is a must.
- Reuse of passwords is a bad idea.
- Do not store sensitive details, such as passwords, on devices anyone else can get access to.
- Check that your platform uses encryption on all pages, not just the login screen.
- Phishing emails are common. When possible, refrain from using direct links. Log in to your account the normal way instead, and see if there is a direct message for you there. There is really no reason for your broker to send you an email without also sending you the same information within the account.
- A quick monthly check of your account settings and linked devices catches odd changes.
- Do not share your login information with anyone. It is best to stay far away from any “professional” who wants to trade on your behalf, and from third-party software vendors who claim they need access to your trading account to install software.