Some business professionals have dedicated their careers to the art of binary options trading, while other financial experts shrug it off as nothing more than gambling. Whatever your opinion on the subject, this business practice has proven great potential for large gains. Regrettably, scam artists use this market segment to con people into losing their money.
What is Binary Options Trading?
At its core, it is a form of an options contract that hinges on the state of the commodity market. What differentiates this type of trading is its binary nature of the outcome. To explain it further, the price of any asset on the market can either rise or fall. The interested parties may speculate whether certain stocks and goods will present an increase or decrease in value at a specific point of time. Contrary to stock trading, they are not buying or selling anything, but rather they place a type of bet. If they predict the outcome correctly they earn money, and conversely, they lose if they guess wrongly. This creates a win or lose scenario, and hence the binary in the term.
For instance, an individual may look at oil stocks and see the price holds at 50E. Afterward, they contact their binary options trading institution and declare that at 9:00 am the oil stock price is bound to present an increase. Of course, they pay a sum of money and with this, they place a form of a bet. If at 9:00 am the stock displays a rise by a single cent, the investor will receive predetermined gains. On the other hand, if the price presents a drop by a single cent they lose their money.
Laws and regulations regarding binary trading opportunities vary significantly worldwide. This enables financial institutions and companies to offer wildly different offers and business terms. This gets even more chaotic with online trading and binary options websites. It is no wonder why scammers flock to these financial spaces.
What Is a Binary Options Scam?
To put it simply, fraudulent groups and individuals can use binary options trading to exploit investors. The target gets sucked into a scheme purposefully designed to extract their funds without any chance of gains whatsoever. Sadly, these scams are widespread and frequent in this finance area, and even seasoned traders end up being a victim.
There are a plethora of unregistered and illegitimate platforms which will promise money-making tips and get-rich-quick opportunities for a monthly fee. Of course, their advice is inaccurate and seldom profitable. In the end, their beneficiaries lose their money and they can’t get in contact with any of the personnel.
These fraudsters have well-developed systems and they will use any means necessary in order to rob an unsuspicious investor. Con artists will present themselves as verified experts with unique insight into the market fluctuations. It is not uncommon that scammers will try to sell state-of-the-art software which can make amazing bets for their users. Quite often, these programs end up being malware.
Commonly, scammers use official sites, message boards, and social media to promote themselves to lure their victims. Unsolicited calls and emails turn into aggressive pitches presenting a now-or-never investment opportunity. With a constant stream of information, it’s difficult to discern the real trading professional from the scam artist.