How does Binary trading fraud work

What are binary options?

Working with binary options is similar to trading on the Forex market, but the whole process is much easier here. In the classic binary options trading scheme, a trader places a bet on an increase or decrease in the price. If the rate is triggered, he accrues his income. Simultaneously, this is not just a roulette-type game. There are many tools for predicting the most probable trend for trading binary options. Indeed, most of the factors affecting a trader's work regarding binary options are already known beforehand.

Is binary trading legit?

Different countries have different approaches to regulation. In most countries the market is unregulated or poorly regulated, and therefore there are cases of fraud. In other countries, binary trading is banned.

Binary trading is a relatively new form of investment in the U. S., and with that comes some uncertainty as to its legitimacy. In order to protect investors, the U. S. has put in place several regulations governing binary options trading, including those from the Commodity Futures Trading Commission (CFTC) and Securities Exchange Commission (SEC).

These rules are designed to prevent fraud or manipulation, ensure transparency for investors, require brokers to be appropriately regulated by financial authorities and keep customers’ funds secure at all times. It is important for traders to understand these regulations before engaging in any activities related to binary options so they can make sure their investments are safe and legitimate from start to finish.

Is binary a fraud itself?

No, it is not. Brokers can work legally. Binary options trading is structured in such a way that investment expectations are always lower than risks, since the investor risks 100% of the profit on each bet, with the opportunity to receive only 50-90% of the winnings. In this regard, binary trading is more of a type of betting than an investment area.

However, if the broker works legally, this type of trading is acceptable and regulated in some countries at the official level. The main thing is that investors should be aware of the risks and opportunities equally. So, generally speaking, binary options are considered to be legitimate investments when traded through regulated brokers who comply with the relevant regulations in their jurisdiction. As long as traders use registered and licensed brokers that meet the required standards, they should be able to make safe investments without having to worry about being scammed or manipulated by unscrupulous operators.

At the same time, there have been many reports of fraudulent activities related to binary options trading such as unlicensed brokerages operating illegally or misleading advertising campaigns that promise quick profits with no risk involved. These occurrences should not be taken lightly and potential investors should always do their due diligence before investing in any kind of financial product including binary options so they can protect themselves from losses caused by scams.

How does binary options fraud work?

The classic scam on binary options is the constant delivery of "super-profitable" and "win-win" signals for trading. Binary options scams create a large number of different sites on which they invite users to get acquainted with their offer in an inappropriate manner. It’s intended to spark the attention of credulous or novice traders. Binary site scams often give a 100% guarantee that the future client will earn a pretty penny on their (the broker’s) approach to binary options. They even try to prove this by posting screenshots of the page with the income received from transactions carried out with the aid of these schemes. As a rule, most of these self-styled evidential schemes turn out to be a fluke upon close examination.

They promise naive clients the moon and the stars and favorable conditions for trading, but their real goal was to deceive the trader, steal his money, and quickly move on to the next naive target. As a result, a person can call support and complain and demand a return of his account deposit, but all these hands-on attempts will not be successful because no one forced the client to make the deal.

As a rule, fraudulent sites hide behind the name of some character, often fictitious. For example, a so-called John Johnson offers you a win-win strategy or super signals. He offers them completely free of charge because he has already earned a fortune beforehand, and his natural kindness simply does not allow him to keep this knowledge a secret. He wants everyone else to get rich too, but he does not ask for anything in return due to his philanthropic nature.

When a trader becomes extremely interested in binary options, all of a sudden it turns out that the author does not need to pay anything specifically for them to get signals. However, you are obliged to pay the broker by making an “initial deposit to open your account”. This is just another well-worn “pay to play” scheme. If the trader doesn't pay upfront, he cannot open an account which is needed to test the effectiveness of the awesome win-win strategies on offer. Wink-wink.

Some say that these strategies can be tested anywhere; and that tests can be done on any account already opened by a trader on a trustworthy broker’s platform; or on a demo account, where the trader will not go into the red if the strategy or the signals don’t work. Besides, there are cases when traders already have an account with a broker, and the author of the binary options scam nevertheless convinces them to join the ploy. It would be smooth sailing since you do not need to create a new account and spend money on a deposit, but unfortunately, such users won’t get these miraculous win-win methods.

So why is it extremely profitable for binary options scammers to get a new client for a particular binary broker? The fact is that this is exactly how these fraudulent schemes work: the con artist receives money from the broker for each client brought in based on the customary referral program. The client replenishes his deposit (as a rule, the amount can vary from $250 up to $500) and tries to trade on the signals supplied by the binary options con artist. But it is not profitable for the broker if the client wins trades. Instead, the scammer generates revenue only from the lost trades. Therefore, the signals are likely to be inoperative, and the trader loses his deposit account. The result: everyone makes money in this scheme except the trader.

There are cases when the unscrupulous broker himself creates the image of a professional trader (you do not have to pay fees to someone else, but keep this money for yourself) to attract new clients with the help of a third party. Such a scheme of binary options looks like a dishonest marketing ploy, where the middle-of-the-road people suffer.

How to spot binary fraud companies

They not only promise a guaranteed income, but also indicate the exact amount of money, and the time frame during which you can earn the money. Do not blindly trust the representatives of binary options that offer miraculous strategies that use super-profit trading robots or even trust management services that will magically earn pots of gold. If a company asks you to deposit more than $200 from the get-go, most likely this is a scam to steal your money.

You should not trust companies that offer a vast number of various bonuses and promotions. This is the distinctive feature of a fraudulent binary broker. Do not believe blindly that you can make money in the binary options market without any expertise and experience. Binary options require certain know-how, practice, and experience to be successful — just like any other business.

Binary options brokers blacklist

Company	SCAM date
1 View Alldayoption	2014
2 View Anyoption	2014
3 View Ayrex
4 View Banc De Binary	2018
5 View Binex	2015
6 View Byrex	2013
7 View Fenix-Option	2016
8 View GrandOption	2015
9 View HY options	2015
10 View MFX Broker	2013

Best binary brokers

1

9.4/10

Go to broker

Your capital is at risk.

Minimum deposit:

$5

Review

CloseOption is a binary options broker that was registered in Georgia in 2013 and operates under the supervision of the National Bank of Georgia. It provides its clients with trading in pairs with fiat currencies and cryptocurrencies through a proprietary web platform. CloseOption’s services are used by over 2 million traders worldwide, including the United States. The broker specializes in active options trading but also offers an affiliate program to generate passive income. More than ten payment systems are available to CloseOption clients for depositing and withdrawing funds, with the majority of them allowing fee-free transactions.

Pros/Cons

•licensed by a reputable financial regulator;

•loyal first deposit of $5;

•size of payments increases as trading volumes increase;

•money prizes for trading with virtual funds;

•many ways to contact technical support that operates 24/7.

•a small range of trading assets;

•clients cannot trade with leverage;

•payments on accounts with small deposits are lower than those of competing brokers.

Study Review

2

9.2/10

Study Review

Minimum deposit:

$250

Review

Nadex is a binary options broker working mostly with US and EU traders. The company was founded in 2009, officially registered in the State of Illinois, and regulated by US law. The broker's regulator is the CFTC (Commodity Futures Trading Commission). The main competitive advantage of Nadex is its completely transparent work, controlled by one of the most reputable regulators in the world. A distinctive feature of the broker is unique binary options products and direct access to the US exchanges.

Pros/Cons

•regulation by CFTC;

•binary options toolkit is easy to use.

•the broker works through an intermediary from the EU;

•commission for each trade is US$1;

•limited range of offered products (3 types of options);

•all information on the site is in English only;

•complex verification procedure that meets the requirements of US legislation;

•high entry threshold - $250;

•there is a flat fee for withdrawing money - $25.

Study Review

3

9.1/10

Go to broker

Your capital is at risk.

Minimum deposit:

$5

Review

The Pocket Option broker is part of Gembell Limited holding, which was founded by a group of professionals seasoned in trading and investment activities. The company is mass-market requirements-based, therefore, it provides quality services to binary options trading in the OTC market access. The broker strives to make the trading process as simple, clear, and convenient as possible. For this reason, Pocket Option has developed a unique trading platform to ensure stable trading for traders and investors.

Pros/Cons

•low threshold for entering the market; the first deposit starts at $5;

•social trading platform generates passive income.

•not licensed by any reputable regulator;

•to trade Forex through MetaTrader 5, you need to deposit at least $1,000;

•support service responds within 24-48 hours, which is also too slow.

Study Review