What is a Binary Options Scam?
Binary options is one of the most profitable and convenient channels for trading. The major setbacks of most traders however are the ugly stories that they hear about scams but with the growth of information that is being shared online, traders can now easily protect yourself from getting duped and avoid becoming a victim of a binary options scam. Here are some of the parameters that are important to check when choosing a broker:
First of all, is the broker that you are eyeing at regulated? It is best that you determine which country the broker is based. If its headquarters is established on a country where regulation is poor, then you need to reconsider opening an account with this brand since there are no watchdogs that are monitoring your financial activities with them.
2. Customer service
What kind of customer service is available? Always choose a broker that offers the highest quality of client support. When they say that they are available 24/7, try contacting them to make sure if they promise is true and when you do get a response, try to evaluate the performance of their staff. Poor customer service is obviously a sign of binary options scam and best solution to avoid this is to choose a brand that has the highest level of customer support.
3. Terms and conditions
Never invest in a field that you are not fully familiar with. Make sure that you read the terms and conditions page thoroughly to make sure that you fully understand the agreement between you and the broker. Is it clear? Does it make sense? It is highly recommended that you to carefully read the arrangement prior to making any investments. And if you do have any questions, make sure that you contact their customer service department to clarify these issues.
4. Quality of design/software
How is the quality of the web design and interface? Is it an advanced site? Most cunning brokers offer a trading software that is low in quality and it’s very easy to detect this by simply testing it. The common pitfalls of most traders is that they immediately sign-up for an account without even trying the platform’s services. If the site offers a demo account then do take advantage of this feature to evaluate its usability and quality. If you find the demo version to be faulty, then it is best to look for another brand.
5. Payout rates
Most brokers advertise on the huge payout rates that they offer. However, some scammers get away without even getting noticed by actually paying you but only with a lower rate. This usually happens after a trade has expired and an incorrect payout percentage is credited into your account. Make sure that you check the profits that you earned are correct so as to avoid getting ripped off.
6. Withdrawal process
Scam brokers usually attempt to block any forms of withdrawals especially when you’re in a winning streak. Sure you may have gotten a lot of in-the-money trades but the problem that you might encounter is when the site will avert you from claiming those profits. It is best that you make a good research on the practices of such brokers before opening an account and transferring money. Start by depositing just a minimal amount and try cashing it out. If you find that they do process your withdrawals then it’s an indication that you are in good hands.
7. Brand reputation
Does it have a good reputation on the trusted sites like forums, review websites and trading-related websites? If you find that the brand has a lot of negative feedbacks then you might want to reevaluate your choices. A good and trusted broker usually responds to these types of comments in order to protect their reputation and status in the market.
8. Financial data
False financial information being provided by the broker is another form of scheme that is done by scammers with the purpose of making your trades end out-of-the-money wherein the funds that you invested will be lost to the scamming broker. In order to avoid this, make sure that you check the financial information that is provided to you is legitimate and reliable. You can compare the data that is coming from your broker and financial sites such as Reuters, CNBC or Bloomberg.
9. Trading tools
Scammers don’t usually invest much on the tools that they offer. The more informative and useful the tools are, the less chances that the brand is a scam. If you see that the site covers a lot of technical and essential details about trading then it is most likely to be a good one. This is because the platform wants you to learn more and not just push you into investing right away. Informative tools such as e-books, articles, videos, economic calendars and even seminars are good indicators that the site is genuine and legit.