Binary options scam
The brokers may manipulate pricing to influence trade results. Binary Options brokers manipulate the trade’s expiration time (more on that later). Just before the trade expires, the server disconnects. Lastly, your withdrawals vanish without a trace.
It is how binary options brokers may cheat you. The vast majority of binary options brokers are operating online today. Many are unregulated, and you should avoid them in all instances. Otherwise, you may get scammed.
WHAT DO YOU NEED TO KNOW ABOUT BINARY OPTIONS?
Are you curious to know about binary options? We are at your rescue! All you need to know is mentioned below. So, let’s start digging in.
A binary option is a contractual option. The payoff relies on the preposition “Yes” or “No.” Binary options have a predetermined gain and loss sum. If the binary options are profitable, the dealer may be compensated.
The dealer loses money if it expires out of cash. You can only use the binary option once; the initial pick is your last. A binary option does not allow the customer to buy or sell the asset.
Binary options illustration
Binary options have an expiration date. When a binary option expires, the trader will get a certain sum of money or nothing. For the trader to profit at expiry, the product’s value should be on the right side of the target price. Binary options traders bet on assets such as gold, equities, and markets. They trade on the price movement of these assets and hope to profit.
ARE BINARY OPTIONS A SCAM?
There are many options available to you as a trader. But are binary options a scam? Here, I’ll explain how secure binary options are. Let’s get started.
Computerized trading platforms dominate most of the binary options industry. Many trading companies do not adhere to their country’s regulatory requirements. It is impossible to dismiss the possibility of such businesses engaging in criminal behavior.
Such sites are also notorious for their deceptive marketing tactics. You should be well-informed about any brokerage firm you are considering. Yet this does not mean that binary options are always a rip-off. They are simply not a wise investment if you trade them with the wrong broker.
Binary options providers, for the most part, are legitimate enterprises. Your cash will not be lost/stolen because they are authorized brokerage firms. The issue is that most brokers make promises that are impossible to keep. They promise the kinds of results that are beyond the typical user.
Most of the time, the brokers show examples of people winning bucks. Such circumstances do occur. However, they are the exception rather than the rule. Many customers, unaware of this, register with a binary options platform.
Most people end up losing all of their money. Binary options trading can be successful or loss-making, like the two sides of a coin. Preventing binary options fraud is simple if you tackle each broker with diligence, No matter how large or small your trading account will be, study the broker before investing.
Study its website thoroughly and be skeptical of exaggerated marketing claims. Do not attempt to withdraw any more funds if you think you can’t. Instead, get in touch with the appropriate authorities. If you’re cautious, all associated hazards will be minimized.
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TEN WAYS BINARY OPTIONS BROKERS CAN CHEAT YOU
Now you know that binary options scams are out there. Let’s explain the top ways a broker can scam you. Here I’m going to cover ten ways. Let’s dive in!
1. Manipulating the expiration time
Options have expiration dates that are predetermined. Therefore, you must pay great attention to the time frame when you enter a trade. Does the order start and end at the precise times you specified?
Is the timer correctly counting down? Lastly, does it expire at the scheduled time? Some brokers will manipulate their timers to make them run quicker or slower so that your deal loses, thus generating a profit for them.
Binary options expiration time
2. Identity theft
Regulatory organizations receive many complaints about this. Binary trading platforms can gather customer data, including credit card numbers, passport numbers, and drivers’ licenses. These are priceless details that should under no circumstances be shared.
Yet this data may be used unlawfully by the trading platforms. Thus, it is advised that no personal information be disclosed. Fraudulent brokers may also request copies of your utility bills and other personal documents. You should not comply with these requests unless you have confidence in the broker.
3. Hunting bigger fish
Brokers know how confidence-boosting little wins can be. And that traders who have success are tempted not only to remain active traders on the broker’s platform but also to invest more money in subsequent trades.
However, that increased investment is no guarantee that the next trade will also go your way. But brokers will lure you in with little wins to give the impression that you are profitable when trading options. They will start stealing your money if you deposit a significant sum in a single trade.
Luring for bigger fish
So, they may reclaim your gains and a sizable portion of your account balance. These brokers also know that most traders who lose money in this way will likely make another deposit to try and claw back their significant losses. So, the cycle goes on and on.
4. Platform manipulation
Some brokers like to scam their clients through platform manipulation. The platform manipulates the prices, the time of the trade, and the payouts to result in a trading loss. The platform manipulates its software to show losing trades.
This sort of misrepresentation leads to prices and payouts being altered. When the platform sees that the client has a 100% chance of a good trade, the software expands the expiry time, so the trade results in a loss. Every trader has his techniques for trading on different platforms.
However, it is the broker that controls the technology and thus has the power to change prices whenever it wants. If a trader is set to win, the platform manipulates the price, resulting in an artificial price, so the trader starts losing money. Prices suddenly change by a single tick, right before the trade is set to expire.
5. Disappearance of withdrawals
The most well-known approach to deceiving you is the delay or disappearance of withdrawals. You find that your withdrawals are being delayed. In that case, it most probably seems that your broker is manipulating your account.
Sometimes brokers offer deals and discounts or bonuses. At first, they seem very good, but if they are not examined or handled carefully, they can lead to withdrawal restrictions or the disappearance of your money.
Although IQ Cent promises a lot of bonuses, the withdrawals take time, and sometimes you may not be able to withdraw. Some brokers trick clients into a series of significant commissions and fees, resulting in the disappearance of withdrawals.
The disappearance of withdrawals
Some brokers and platforms have allotted a specific time frame in which the client may make withdrawals. After that, the opportunity disappears. Assuming this time frame expires, you’re expected to contact their support team, which would normally help you get your money back. However, fraudulent brokers usually delay this process by generating false.
6. Fake sales pitches
The trading platform employees often use fake sales pitches to lure clients into their trap. They use fake names, countries, addresses, qualifications, experience, and positions. Anything to captivate you into depositing your cash on their platform.
They sometimes do this by saying that your current binary options brokerage is dishonest. Bit by bit, these tricksters attempt to gain your trust and persuade you to deposit your cash on their trading platform. These people will try to appeal to your own greed. How?
By assuring you that their trading platform will provide you with the best returns, luxury goods, and fake experts. By making you believe that binary options are a quick fix for all your financial problems. But it is far from the truth!!
Fake sales pitch
Their services and products turn out to be far different from those described on their website or in their advertisements. As you may notice if you read their terms and conditions thoroughly beforehand. Scammers also often create fake ‘reviews’ of their trading platform. So ensure that you use information only from trustworthy sources.
7. Connecting to other brokers
Many brokers now offer their trading systems to other brokers and experts on the market. They say their strategies will help you in trading, like copy trading. However, in reality, these strategies are designed to make you lose.
They might seem beneficial initially, but in the long run, they ensure your loss if you keep working on them. You might be trading with a specific broker, and then suddenly, you might be trading with another. It usually means that the previous broker has disconnected.
Sometimes these brokers create duplicate websites of a leading trading platform. And manipulate you into trading on their platform while you keep losing money. So always use a trustworthy and regulated broker who doesn’t lead you to other brokers.
8. Credit card fraud
Credit card fraud is identity fraud. Someone other than you uses your confidential data. Fraudsters are stealing a piece of your identification; your credit card information is used to get cash withdrawals. Credit card fraud can happen through a lost or stolen card.
Fraudsters use your credit card to make purchases without your consent. A hacker can hack your computer and steal your data to commit fraud. Fraudsters can trap you by calling you about bogus prizes or electronic payments.
Credit card scam
A fraudster may engage in spoofing, such as sending bogus emails. Although there is no way to avoid credit card fraud, But you can educate yourself to be better protected.
9. Working with the unregulated brokers
There are a lot of brokers in the forex market; some are licensed and others aren’t. A forex broker acts as a go-between a trader and the exchange market. Hundreds of unregulated brokers operate throughout the financial markets.
Some are highly competitive, while some are downright con artists. Unregulated brokers provide financial services to international traders. The dark side is that they risk traders’ money when trading. These are some of the dangers of dealing with unregulated brokers:
- You cannot be assured of the security of your finances
- You may be risking all of your investments
- There is no regulator with whom to file a fraud complaint
To avoid dealing with an unregulated broker, you must research whether the broker is licensed or not.
10. Ponzi and pyramid schemes
Significant similarities exist between pyramid and Ponzi schemes. They are both built on the same principle: the false promise of profit. Shady investors deceive naïve individuals. Ponzi schemes offer to invest your funds and earn you a big return with no risk.
The scammers in many Ponzi schemes do not make investments. Ponzi schemes require a steady influx of new money to continue. Because they have little or no revenue.
Pyramid schemes are more difficult to establish than Ponzi scams. They are protected since corporate legal teams are formidable. Pyramids allow victims to “earn” money by hiring new individuals for the fraud. The only person guilty in a Ponzi or pyramid scheme is the one who started the fraudulent business operation, not the investors.
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HOW TO AVOID SCAM BINARY OPTIONS BROKERS?
Now you know some of the ways brokers can scam you. I think it’s the right time to tell you that you can avoid falling into the trap. But you must remember these points!! So, let’s find out!
You can avoid the binary options broker scam in the following ways:
Always look into a firm’s or financial professional’s background
Before investing, look into the past of any firm or financial professional you’re considering working with, including their registration with regulators or license status. Please don’t give them your personal information until you can verify their registration.
While remaining within the rules and regulations, firms may operate unethically. Unregulated binary options companies aren’t always scammers but it is surely safer to use a regulated platform. CySEC has fined many binary options brokers that were not insignificant players in the markets.
A licensed broker will always be concerned about his reputation since he will lose his license if he is fined. Always check that a broker’s license is still valid, as some have had their licenses revoked in the past because of misconduct.
Visit the website
On a scam trading website, you may find various red lights. First, does the website look unsafe or poorly designed, or is it always having technical issues? However, this is not a precise test as it’s no big deal for some fraudsters to create genuine-looking websites.
Secondly, all legitimate brokers will publish detailed information on their websites regarding deposits, withdrawals, and payouts. Try to read the ‘fine print’ on the website to see if there is anything odd. If you see information that does not match what is being shown on the website, the broker may not be reliable.
Brokers are known to use sign-up bonuses against traders. For example, if a customer loses money after obtaining a bonus, they may refuse to let him withdraw funds. It’s probably a scam if a broker says something like their prices are not the same as those on the open market. It is a red light that they are scammers if they claim to have a low loss rate.
Always read the reviews
Going through user reviews might help you spot binary options fraudsters. For your information, online binary trading scammers may occasionally generate fake reviews praising themselves on the internet. So investigate your information thoroughly and only from reliable sources. Also, looking for binary options companies on online blacklists is always a good idea.
Regulatory bodies, such as the Financial Conduct Authority (FCA), administer legit binary options brokers and often maintain an internet warning list of trading scams. Also, FINRA’s BrokerCheck service keeps track of brokers facing legal action. You can check out the list of regulated binary options brokers here.
Check for customer support
Authentic binary options brokers will always have easily accessible customer support teams. A well-run customer service department is always focused on the trading experiences of its clients. Scammers are frequently tricky to find or only interact via messaging apps.
Be watchful for deceptive marketing experiences
These scammers focus on high profits on investments and ignore upcoming risks and losses. Remember that there is no guarantee that a profit of thousands of dollars in just a few days of trading is possible. Many fraudulent brokers use targeted social media ads on platforms like YouTube and Facebook to hunt down potential customers.
Some may claim more realistic results, though, and not all binary options trading scammers use this type of promotion. Furthermore, reputable brokers will never cold-call potential clients on the phone without their prior consent.
Some scammers may send you fake emails stating that you are already registered with them. Immediately end the conversation and delete the emails. One last thing; beware of any broker who demands quick payment as it may be a scammer.
Is it safe to use binary options?
In general, binary options are considered to be risk-free investments. However, be careful while investing funds/capital. You must research to verify that you are working with a reliable source.
Can we use binary options to make money?
Investing in options likely to expire in a fixed period can produce money, especially for anyone well-versed in the marketplace dynamics.
Can binary options lose money?
Binary options trading is simple to understand. But its success is contingent on the firm or service you invest in. Many traders incur losses due to broker fraud or other issues.
What is the big deal about binary options?
Regulatory organizations continue to receive numerous accusations of scams. Deceptive trading sites offer different ways to buy/sell binary options. Two issues come up time and time again.
Which binary options trading method is the most effective?
If you’re seeking a method that guarantees profit, disappointment awaits you. Everyone would be wealthy right now if any such plan existed. Focus and knowledge are the only ways to achieve success.
What is the smallest deposit you may make with an options trading broker?
A trade’s minimum investment value varies from broker to broker. The minimum amount for level 1 is typically below $1,000. For further details, you can contact brokers through their helpline.
What exactly do we mean by demo accounts?
Beginners can practice trading with virtual money using a demo account. It is ideal until you have gained the necessary experience to trade with real money.
Is it possible to trade options while I’m on the go?
Sure, you can. The top binary options providers are compatible with iPhones, iPads, and tablets. You have the option of trading on your browser or downloading trade apps.
The concept of binary options intrigues me. What should I do?
We recommend being receptive to new information. The top options trading sites may also serve as fantastic educational tools. For several months, set up a demo account with one of them and practice. Read stuff, take online classes, read ebooks, and see training videos.
So, there you have it! Now you know how binary options brokers can scam you. But I have also mentioned ways to avoid it. So, you can make your decision confidently.
If you are looking for the best binary options broker, we suggest looking at our list. We have researched and tried these brokers, and they have proper regulation. So, make sure to give it a read! You should also read our YouTube Option Trading review.
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