Binary Options Scam

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  • Binomo
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Binary options scams

Find out how binary options work, how to avoid scams and what to do if you are scammed.

Update: The sale of all binary options to retail consumers is now banned. If you are offered binary options, it is probably a scam.

Binary options are a form of fixed-odds betting. Typically, a trade involves whether an event will happen or not (for example, will the price of a particular share or asset go up) and the outcome is either yes or no.

If the investor is correct, they ‘win’ and should see a return on their investment; if they’re wrong, they lose their full investment.

From 2 April 2020, we permanently banned firms from selling binary options in the UK.

This follows the European Securities and Markets Authority’s (ESMA) temporary ban on the sale of binary options to retail consumers across the EU, including the UK, since 2 July 2020. Our ban includes certain binary options that were excluded from ESMA’s temporary ban.

How binary options scams work

Binary options fraudsters often advertise on social media – the ads link to websites that are well-designed and professional looking.

The firms operating the scams tend to be based outside the UK but often claim to have a UK presence, often a prestigious City of London address.

Scam firms may manipulate software to distort prices and payouts – they then suddenly close consumers’ trading accounts, refusing to pay back their money.

We are aware that scammers are targeting consumers searching for investments online, in particular through search engines like Google and Bing. Those offering or promoting products or investment opportunities found through search engines are not necessarily authorised or regulated by the FCA. You can check the FCA Warning List for firms to avoid.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    The Best Binary Broker 2020!
    Perfect For Beginners!
    Free Trading Education!
    Free Demo Account!
    Get Your Sign-up Bonus Now!

  • Binomo
    Binomo

    Good Broker For Experienced Traders!

How to protect yourself

Be wary of adverts online and on social media promising high returns from binary options trading.

You should only deal with financial services firms that are authorised by us. As the sale of binary options to retail consumers is now banned any firm offering binary options services is probably unauthorised or a scam.

If you have any doubts, check the Register to ensure a firm is authorised. You can also check our Warning List of firms to avoid.

You should check the firm isn’t a clone firm by asking for their firm reference number (FRN) and contact details and then calling them back on the switchboard number on our Register – never use a link in an email or website from the firm offering you an investment.

Always be wary if you’re contacted out of the blue, pressured to invest quickly or promised returns that sound too good to be true.

If you have been scammed

You can report the firm or scam to us by contacting our Consumer Helpline on 0800 111 6768 or using our reporting form.

If you have already invested in a scam, fraudsters are likely to target you again or sell your details to other criminals.

The follow-up scam may be completely separate or related to the previous fraud, such as an offer to get your money back or to buy back the investment after you pay a fee.

If you have any concerns at all about a potential scam, contact us immediately.

Is Binary Options Trading a Scam?

Binary option trading itself is not a scam but because too many players in this industry resort to dirty tactics to make money off aspiring traders, the whole binary options trading industry is getting a bad rep.

Below is a list of ways in which scammers can get you if you are not careful.

Fake Brokerages

It is not too diffult for someone to setup an online binary option brokerage and start accepting clients’ money. Many such fly-by-night brokerages disappear overnight with their client’s money and then re-open under another name to scam again. Be sure to only trade with regulated binary option brokerages that has been in operation for at least a few years.

Withdrawal Problems

Many scam brokers make it extremely difficult for you to withdraw your money from your account. They will ask you for all sorts of documents for verification before letting you withdraw any money.

Thus, always make test withdrawals before depositing larger sums of money. With regulated brokerages, it should not take more than a few days to withdraw money from your account.

Outlandish Claims / False Advertising

There are many online reviews, endorsements and success stories about people getting tremendously rich easily by trading binary options. These reviews and testimonials are mostly fake and are often paid for by the binary options brokerages themselves and their affiliates. While there are indeed people who made a lot of money trading binary options, they are merely the exceptions rather than the norm and the path to success is anything but easy.

High Pressure Sales Tactics

Be cautious of high pressure sales tactics used by representatives of binary option providers. They often call traders and pester them to deposit large sums of money by luring them in with big deposit bonuses. Often, it is necessary to trade 30 to 50 times the bonus amount in order to qualify for it but the sales people will always fail to mention this fact upfront. In the end, most novice traders will often bust their accounts long before they qualify for the bonus.

Super Secret Auto Trading Systems

Many sites sell some kind of auto trading robots that will trade binary options for you. The website creates an account for you at a scam broker, then instructs you to make a deposit and supposedly you can then sit back and relax while it makes money for you while you sleep.

Sounds good? Well there is one problem: The software doesn’t actually work and the broker is usually a scam broker. Once again, if it sounds too good to be true, it usually is.

Payout Reduction

Once you start winning consistently, some unscrupulous brokerages may actually begin to reduce the payout percentage to you. If you trade regularly, make sure to open trading accounts with multiple brokers so you can compare their payouts.

Conclusion

In binary options trading, you are betting against the brokers rather than other market participants. Hence, the broker only makes money if you lose. For their business model to be successful, more clients need to lose than win.

However, this in itself does not make this a scam as all financial trading are zero-sum games. Your wins come from someone else’s loss and vice versa. It is only a scam when 1)The odds are fixed against you where you have absolutely no chance of winning and 2)You don’t get paid even when you win.

The scams typically come about as a result of hyper aggressive marketing, false advertising and unethically operated brokerages. Many people feel scammed because they were promised the moon and the sky only to be hit by how hard it can be to really make money trading.

However, all of the above issues should start to become less of a problem as regulations tighten and the industry itself matures as a whole.

Continue Reading.

What are the Main Types of Binary Options?

Learn how the One-Touch, No-Touch and Range/Boundary binary options differ from the common high-low viety and how to trade them. [Read on. ]

What Assets can be Traded using Binary Options?

Many of the most popular financial instruments such as currency pairs, equities and commodities are available to trade using binary options. . [Read on. ]

Binary Options: Trading or Gambling?

Is binary option a legitimate financial instrument or just another form of gambling. [Read on. ]

Binary Options & Trading Robots: A Perfect Match?

Unlike humans, robots have no emotion and do not need to rest, so they can make a lot more trades than humanly possible, combined with perfect consistency. [Read on. ]

Is Binary Options Trading a Scam?

Learn how you can get scammed when trading binary options if you are not careful. [Read on. ]

How to Select a Binary Options Broker?

With so many scam brokers out there, before you learn how to trade, one must know how to separate the wheat from the chaff and find a trustworthy binary options brokerage. [Read on. ]

Binary Options: Calculating Breakeven Win-Rate for a Given Payout

How often does my trades need to be successful in order to be consistently profitable in the long run when trading binary options. [Read on. ]

Are Binary Options a Scam? In Which Country it’s Legal? Know More

A binary option is a financial option in which payoff is a certain fixed amount or nothing at all. Though binary options can be traded through regulated or unregulated forms of trading, however they are prone to internet fraud.

Many binary options brokers are also exposed to questionable operations over internet to ensure that they are following regulated practice of trading. Is binary option really a scam? Well, the answer is yes it can be. There is not denying the fact that binary options is one of the most lucrative financial investment or gamble that can payoff really well if it works but there are always risks involved in any investment.

Matters related to money are always vulnerable to scams and binary options scams are becoming a common occurrence these days. Therefore it is important to choose a broker who is locally licensed and regulated. Are you planning to invest in binary options and want to know more about its legal information? Find out the truth here.

Binary option is one of the most popular ways to perform trading these days. People are easily fascinated with binary option mainly because of hundreds of binary option brokers available online. The trades in such options can be easily placed from computers to mobile phone.

Due to so many complications involved in binary options, many people are concerned about knowing whether it is legal or not. The key point to notice here is that many countries have a regulatory license under which brokers can operate while other countries have not yet placed any regulation on its running. Hence in some countries, binary option is completely legal and regularized while in others, it is either in transitional state of getting regulated or there is no regulation involved at all.

Europe, UK, Australia, South Africa, Singapore, Canada or US citizens must not worry about the legality of Binary option. The main regulatory bodies based within the countries provide a certain license of operation which enables individuals to trade in it. When a binary option broker is regulated then he/she has to work under the laws set by Country. The license under which option brokers operate is CFTC (valid in USA) and CySEC (valid in Europe).

What kind of restrictions is imposed on Binary option trading?

Most of countries have restrictions on amount of money or transactions done abroad and also deposit of money with binary broker. To ensure that the market is completely regularized some governments also block websites that don’t provide clear information or adhere to online certification and regulation.

Binary options trading are high risk gambling method and sometimes are also associated with investment. Due to the transactions involved and inclusion of third party transfers it is considered illegal in some countries like India or other Asian countries. It is a non-bail able offense in some countries as well. Nonetheless, no restrictions have been imposed regarding to trading on individuals in any country. Law prohibition can’t be easily imposed unless certain legal financial tools are defined.

It is easier to say that legality is somewhat linked with regulation. If any investment or trading is regulated by governing body of country then it makes it easier to legalize it as well. Most of the binary options trading are done online using internet based trading platforms and most of the brokers are working offshore.

In case of any legal issues with binary option broker, one can file a civil complaint. However, while filing a complaint it is important that individuals make choice of legal and legit company that can be questioned by law for not complying with regulations or entering into fraudulent methods.

How to know if you are dealing with legit binary option broker?

When you are planning to buy a binary option, it is important to understand which option you are about to choose. If you have already started trading binary option online then you must check few below points and scrutinize properly so future financial decisions can be taken properly.

  • Search online for reviews: In case some people have lost money to a broker then he/she will definitely express views/negative comment on any platform. Performing extensive search online about the broker is the best thing one can do and know about the broker.
  • Look for warning: Many regulatory bodies of countries also issue investor alert in order to warn investors about any new fraudulent companies, promotional schemes or binary options using new trading pal.
  • License and regulation: One of the key aspects of any binary option broker is to look for license of broker and regulatory authority if any in the country. If you are able to find the broker online operating under legal license then you don’t have to worry about legality.
  • Independent broker reviews and comments: Even binary option broker post about their reviews and comments online. Reading comments from brokers or other people in community can give you an estimate about the binary option broker you are about to choose.

Conclusion

Yes, Binary option is legit but you need to be careful before choosing an online binary option. Lots of scams come up and take advantage of people entering for the first time. However, this can be easily avoided by being proactive and conducting appropriate research of brokers and companies you are considering dealing with.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    The Best Binary Broker 2020!
    Perfect For Beginners!
    Free Trading Education!
    Free Demo Account!
    Get Your Sign-up Bonus Now!

  • Binomo
    Binomo

    Good Broker For Experienced Traders!

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