Binary options, while a legitimate form of investing in and of themselves, have been plagued with scams and confidence men. So, before anyone puts his or her hard-earned money into purchasing binary options, it’s important to look a little more carefully at precisely what is being offered, and by whom, before deciding to go all in with an investment. Otherwise it’s very likely that someone’s investment capital will wind up the pocket of someone from which it will probably never return.
Look at Where The Options Are Selling From
There are a lot of countries in the world that have loose restrictions on financial markets and exchanges, to put it lightly. Many individuals that are running scams will operate out of these countries, providing them distance between their targets and themselves, as well as the protection of a flimsy law that nearly guarantees little interference from their host country’s authorities. Locations such as Cyprus are popular for this kind of scam, however there are rural parts of African nations like Nigeria, or South American countries like Nicaragua where similar scams have run out of as well. If someone is not familiar with the laws and financial responsibilities of businessmen in the market in the country where an “opportunity” comes from, then that person should stay far away from it no matter how sweet the deal sounds.
Take a Close Look at Who is Selling
Another aspect of binary options scams is the individual that’s behind them. Many operators, knowing full well that certain countries may have a bad reputation, can make it appear as if they’re operating out of the United States, or some other, Western country. So before someone decides to bite on a promising line, it’s important to research the broker who claims to be behind the binary options in question. Simply typing in the broker’s name followed by the word “scam” should bring up any relevant notes left by people that have been burned by the scam, and who have tried to make their predicament known.
Examine The Options in Question
For users who have experience with binary options, and who know how they work, it’s often a relatively simple matter to spot a scam. Perhaps the individual is just charging an extra 10% of a transaction and pocketing the profits, or he’s charging clients for something they could do for free. More serious scams will involve things like selling options that are not what the broker claims they are, or which may not be valid in the country they’re being sold in. Or, in some circumstances, even valid in any country at all! While this kind of scam is unlikely to pass in a legitimate market in a carefully regulated country, it is possible for such things to slip through the cracks. This is especially true on the Internet, where a scam artist can simply lie to users, and still get a return on his efforts from some people.
About the Author
D. Brezinski is an experienced binary options trader and has dedicated his time to writing educational articles about online trading. He is an editor at ActionBinary.com and is constantly trying to enrich his knowledge on binary options trading. Having a deep understanding of trading techniques and strategies, Daniel has now focused on creating a full practical tutorial on binary options trading.