Are binary options a scam, a rip-off, or fraud?

  More and more often on the internet you can find the opinion that binary options are a scam. This view is mainly held by those who have only participated in binary options once or have heard little about them. So, let us figure it out: are binary options really a scam?

 

What are binary options?

 

  Binary options are a kind of betting, only instead of sports results, the main object is the behavior of asset prices in the financial market. A trader (player) must predict whether the price of the underlying asset will rise or fall in the near future.
  Note that there is no need to specify the exact percentage of increase or decrease: the trader only predicts the direction. That is why binary options are available not only to financial analysts, but also to people who more or less understand the current market situation of the chosen asset.

  Options became popular because they do not require large investments. The investment amount can be less than $10. Accessibility is explained by the fact that the investor does not buy the asset, but only places a bet. One option can be sold an unlimited number of times.
  The expiration period of a binary option ranges from several minutes to several weeks. Options with a term of one month are less common.
  Traders aim not only for easy but also fast profits, which is why binary options with durations from one minute to one hour are especially popular.

 

Is it possible to earn money on binary options?

  The question “Are binary options a scam?” usually arises after a person learns how much profit can be made. With a correct forecast, traders earn up to 85% of the placed bet. Many brokers even guarantee a return of 15% of the investment in case of a loss. It is hard to imagine that such profits can really be made online. Involuntarily, the feeling arises that we are being deceived somewhere.
  As already mentioned, the specifics of binary options make it possible to increase the number of players without obstacles. The broker pays the winnings of some traders from the unsuccessful bets made by others. Therefore, such high percentages of payouts are insignificant for a successful broker.

  Still, many believe that binary options are a scam because the percentage of winning trades out of the total number is not very high. This is indeed true, but such statistics are created by inexperienced traders who place bets at random or based on insufficient data.
  In order to earn money on options, one must analyze the financial market and place each bet thoughtfully.
  Another reason to distrust binary options is that brokers may falsify trade results, and it is extremely difficult for a trader to verify this, especially in the case of short-term options. Of course, this is possible, and to avoid it, one should use only the services of brokers who have already earned the trust of thousands of other players.

 

How do people get scammed with binary options?

  The idea of binary options itself is completely transparent, but the fact that there have always been people willing to profit from deception cannot be denied. Some brokers resort to tricks in order to attract more players and make them spend more. Here are some of these tricks:
  1) Profit over 100%.
  It cannot be fully called fraud, of course. Brokers do offer more than 100% of the bet amount in case of a win, but only for a certain period of time, for example, as part of a promotion. Constant operation in this mode can simply lead to bankruptcy.
  2) Subsidiary organizations.
  Fraudulent brokers often hide behind the names of well-known websites. When asked about plagiarism, they claim to be subsidiaries, while in reality the “big brother” has nothing to do with them. After operating for about a month, such a broker disappears, taking users’ deposits with them.
  3) Recommendations.
  Large brokers offer their traders forecast recommendations. As a rule, these are email newsletters that provide truly useful advice on buying binary options for the coming day. The problem is that brokers direct traders to options with minimal payouts, distracting them from more profitable deals.

 

How not to fall for a scam?

 

  1) If you are a beginner and are not yet familiar with the rules and tricks of binary options, you should study this topic in more detail. The more information you obtain, the lower the chance of falling for any kind of fraud.

  2) When choosing a broker, try to rely on reviews from real users.
  3) Before your first binary option trade, carefully analyze the price behavior of the chosen asset in the near future.
  4) In case of a loss, remain calm and do not give in to азарт. Binary option bets must be placed thoughtfully.
  5) Do not place large bets, even if you are confident in the outcome: it is too risky.
  As you can see, binary options are not a scam; you just need to know how to use them properly.