What are Binary Options?
Binary Options is a trading platform where the investors decide if the market will rise or fall by a given period. If you think it will increase, then you choose Yes or No. The only two options to choose from, hence it is called Binary Options. You either gain predefined profit or lose the whole. There is no in-between.
Binary Options are also called “all-or-nothing options” due to their all-or-nothing payout structure.
What are Binary Options scams?
Binary Options in itself is not a scam. But the scammers out there are pretty clever and use various tactics to lure you in and then run away with your hard-earned money.
There are many websites and apps out there which are not legitimate. Sometimes determining them can be challenging, and the scammers take advantage of the same point. For example, you download a binary options app or register into a binary options website and begin trading. You just cannot predict the market. Ergo, you may either win or lose. But in the scammed website or app, the software is customized to go according to the user. If the user chooses to rise, the software will show that the market has grown by the end of the specified time; hence, the user gets his share of the profit and vice versa if the market falls. It is changing itself to what the user has chosen. Like this, after you have gained some specified amount, you go to withdraw the money, you will learn that the amount you gained hasn’t been deposited into your account, but your invested capital has been debited. Hence, you understand that all of it has been a scam, and you were the victim.
This is how the scammers play. This is called the Binary Options Scam.
How to spot binary options scam?
The scammers usually behave and speak like professionals that you wouldn’t even doubt them to be anyone else. They are well trained on how to talk to people and get them to invest in particular app or website.
They use various tricks to lure you in. And once you are in, you are bound to lose your money unless you can recognize if the broker is legit or not. Following are some ways by which you can determine if it’s a scam or genuine:
- Unrealistic returns: The broker begins with calling you out of nowhere and offering unrealistically high returns for small investments.
- Identity: The binary options scams broker does not reveal his identity when prompted. He may use fake names and give phony bank names for deposits and withdrawals.
- License: When asked for a license, the broker will make excuses and swiftly direct you towards another topic from himself.
- Location: The website you are trading with can either not have a place on the site or have a location-based abroad. And when you go to check it on Google, there may not even be such an organization.
- Executive: The broker keeps on changing. It’s not the same from the beginning but is well versed in all your updates and information.
How to protect yourselves against binary options scams?
Irrespective of if you are a newbie in the trading world or are an expert, it is essential to be alert and protect yourself from the binary options scam. Especially the newbies because they are more prone to lose money than the experienced investors.
Below are some ways you can protect yourself against the binary options scam:
- If you are approached with unprompted investment offers, disagree and do not do as they say.
- If anyone approaches you with offers of high returns and huge profits, dismiss them immediately.
- If you click on a link that carries you to a trading website, check if it is genuine. First, read the website thoroughly—lookup for a contact number and its headquarters. Then, look up the location on Google.
- When the broker calls, request their license and verify that they are a registered broker.
- Confirm their registration on the Commodity Futures Trading Commission (CFTC). They have a list of registered traders and their companies.
- Make sure to look at the CFTC’sRED List which contains the list of unregistered trading businesses.
- Never provide your personal information such as a passport or social security number on the phone or otherwise.
- Do not become prey to peer pressure or start investing because you fear missing out (FOMO).
- Before investing, gain a thorough knowledge of Binary Options and only begin trading.
What to do if you get scammed?
If you get scammed by binary options trading scams, you can still get your money back with the help of fund recovery firms. These firms consist of a group of lawyers, financial advisors, and fund recovery agents. They will come together and devise a plan to catch hold of the scammer depending on the information you provide to them. But if you act fast, you can at the very least save some of the money you already spent. To find out what to do, read the following:
- Block your cards immediately
- Inform your bank of the situation and take advice on the next steps.
- If you have provided your passport details, call the passport office and notify them of this problem.
- Last but not least, make sure of informing someone you are very close to of this issue. As not telling them, will only eat you up from the inside.
Binary Options in itself is not a scam. It is a legal trading platform. But there are many scammers whose only aim is to rob people of their money via various methods. Hence, it is necessary to know the various ways of spotting a binary options scammer and also how to protect themselves from this scam.