Binary Options is a scam?

 

 

Why Do People Think This is a Scam?

There are three main reasons people call binary options trade a scam:

1. Many people try it without understanding the operating principles, so they feel cheated when trades don’t go in their favor.
2. People don’t like to be wrong or lose money. They would rather blame a company instead of acknowledge their mistakes.
3. They were actually scammed.

I want to be very clear: there are plenty of real scam sites to be wary of. But a large amount of the “scam” accusations relating to binary options trading have nothing to do with a scam.

By making a riskier investment with your money, you are allowing for the potential of higher returns. This is the reason why people with a poor credit history pay higher interest rates on loans. If you’re happy receiving a lower rate of return, there are plenty of low risk investments available, such as Treasury bonds. 

Actual Scams

Scams occur in almost every industry, but are much more frequent amongst financial companies. Many people don’t understand exactly how financial products work, and are willing to trust any broker that promises massive potential returns.

When it comes to trading binary options, here are some handy ways to differentiate the scammers from actual brokers:

1. Understand how binary options work. No matter what the circumstance, you should never invest in areas that you don’t understand. You will almost always lose money.
2. Talk to people. Call up the customer service line and ask some questions about the platform, binary options trading, and the stock market as a whole. Take down that person’s full name and direct phone number, and call them a few days later. [Don’t use the Live Chat; try to speak with an actual person]
3. Check the address. Find out where the company is based, and if the country has poor regulatory infrastructure, try somewhere else.
4. Look at the Press page of the company’s website. If they have received press from reputable news organizations, they’re unlikely to be a scam. But make sure to actually read the article on the website of the news organization! If you can’t find the article, call customer service and ask for a link; simply having a Bloomberg logo on their press page means nothing.
5. You worked hard to make your money; don’t blow it recklessly.
   
6. If the service seems untrustworthy, but you want to try it, open an account with the minimum balance possible.
7. Never spend all your money on one or two trades. Any person that advises against diversification is not on your team.
8. It’s fine to take general investment advice. But don’t let people tell you exactly what trades to make, or how much money to put on a trade.
9. If you don’t entirely understand what you’re buying, don’t buy it!