There is no doubting the popularity of binary options trading in the investment market today. Binary options are attractive because they are the simplest derivative available, returns can be realized within very short time spans and stories abound of how some investors multiplied their capital many times within a single day. However, where quick and cheap returns are promised there usually appears an opportunity for theft and fraud.
There are many ways in which scamsters can fool you into thinking that you made a genuine trade and lost but the money has actually gone into unscrupulous coffers. There are more than a hundred brokers competing for the same gullible clients and many of them have been less than honest in their dealings.
This is not to say that binary options are bad in themselves. As a financial instrument, a binary option is a bona fide concept with sound and reasoned principles of working. But as all disclaimers associated with high risk investments tell you, you should never put non disposable income to this purpose.
To avoid falling into this trap, start by checking the credentials of your broker. You cannot trust a broker from a country which does not have a strong regulatory framework. You can also look out for signs of fraudulent behavior such as tall promises, “guaranteed returns”, promises of freeing you from your “mortal shackles” and so on. Some brokers will advertise through online videos and tell you with a straight face, “This is not a Sales Video!”. That is certainly a sales pitch if ever there was one.
Then there are brokers who will use trading bots to make customers lose money more often than not. Binary options scamsters will use fake screen shots, fake testimonials, give an impression of false scarcity and pressure countdown.
Beware of claims by fraudulent trading software too. Some applications will claim a complex algorithm that no one can understand, promise success rates of over 90 % that nobody has enjoyed and claim that theirs is a 100 % free way of making money that is simply not true.
Remember that the best safeguard against fraud and theft is your own common sense. There should not be significant difference between what professionally regulated bodies tell you about binary options and the claims make by brokers and trading applications.