Binary Options Scam
A common scam that is run all over the world is the binary options scam. Investing with offshore companies offering binary options should be avoided. Once offshore, it can be nearly impossible for you to recover your money.
A binary option is a type of options contract in which the payout will depend entirely on the outcome of a yes/no proposition.
The yes/no proposition typically relates to whether the price of a particular asset that underlies the binary option will rise above or fall below a specified amount. For example, the yes/no proposition connected to the binary option might be something as straightforward as whether the stock price of XYZ company will be above $9.36 per share at 2:30 pm on a particular day, or whether the price of silver will be above $33.40 per ounce at 11:17 am on a particular day. Once the option holder acquires a binary option, there is no further decision for the holder to make as to whether or not to exercise the binary option because binary options exercise automatically. Unlike other types of options, a binary option does not give the holder the right to purchase or sell the underlying asset. When the binary option expires, the option holder will receive either a pre-determined amount of cash or nothing at all. Given the all-or-nothing payout structure, binary options are sometimes referred to as “all-or-nothing options” or “fixed-return options.”
Do not deal with internet companies that offer binary options that are not registered in your country. Here are three ways these companies scam people:
1. They refuse to credit your account or reimburse funds after accepting your money. You deposit money into your binary options trading account and are then encouraged by “brokers” over the telephone to deposit additional funds into your account. When you attempt to withdraw your original deposit or the return you have been promised, they cancel your withdrawal request, refuse to credit your account, or ignore your telephone calls and emails.
2. They collect information such as credit card and driver’s license data for identity theft purposes. If a binary options Internet-based trading platform requests photocopies of your credit card, driver’s license, or other personal data, do not provide the information.
3. They manipulate the binary options trading software to generate losing trades. The Internet-based binary options trading platform manipulates the trading software to distort binary options prices and payouts. For example, when a trade is “winning,” the countdown to expiration is extended arbitrarily until the trade becomes a loss.
– Source Cftc.gov
Once you signup for a scam binary options account the next step is for them to ask for $5000 to $10,000.
“Customers usually balk and say ‘There’s no way I want to deposit $10,000.’ So you pressure them and say ‘If you’re not really serious about making money, then why are we talking right now?’ Traders try everything. Some are really sweet, some try to identify with them, some try to make them feel awkward — whatever the technique is that gets them to deposit. The favorite technique is to say, ‘If you deposit $5,000, I will give you a $5,000 bonus.’ Customers hear that and they say ‘That’s insane. I’m going to deposit.’”
“You’re not allowed to withdraw any of your money until you use that bonus money something like 30 to 40 times over. Let’s say I give you a $1,000 bonus. You would need to trade that until you made at least $30,000 profit off of it, and then you can withdraw your money. But you will never get to that amount. Let’s say you make $10,000 off of it and you say you want to withdraw, in the contract it will say you can’t withdraw. You can take your original money out, but you can’t take the bonus or the money you earned with the bonus.”
“So clients get stuck in the system, because they don’t want to lose all their money, and by the time they trade 30 times the amount of the bonus, they’ve lost everything.”
Here are a few trading platforms you should avoid:
– Source AMF
You can check the status of any internet based binary options trading platform below. If you cannot verify that they are registered in your country, don’t trade with them, don’t give them any money, and don’t share your personal information with them.
Use FINRA’s BrokerCheck and the National Futures Association’s Background Affiliation Status Information Center (BASIC) to check the registration status and background of any firm or financial professional that you are considering in the USA.
Visit aretheyregistered.ca to check the registration of any person or company offering binary options to Canadians.
If you have lost money to a binary options scam, there is a company that has recently been opened that helps people get their money back. It is called Wealth Recovery International. They have a U.S. office in New York. You can give them a try and let me know what you think of them.