Risks of managed binary options accounts revealed!
There are however, also some pretty obvious red flags that can pre-warn consumers that all might not be well. If you have encountered any of the below, I would advise treading very carefully — and if in any doubt, leave that particular broker — there are plenty of legitimate, trustworthy brokers.
There is no need to take risks with any company that you may have doubts over. A service called MyChargeBack. They offer a free service to let you know if you have a case. Things like unpaid withdrawals, or unauthorised payments can be claimed via banks or credit card companies, and this firm specialise in dealing with those organisations.
The range of services varies based on each case, but they may be able to help:. A reputable broker is unlikely to solicit new business by making cold calls and phoning you out of the blue. These might include the promise of immediate, high returns, and downplaying any risk. In addition to telephone calls, some operators may also email directly, in some cases, suggesting an account has already been opened. Any of these methods of getting in contact is an immediate warning sign.
Hang up, and delete any mails. One source of frequent issues is via deposit bonuses. Dishonest brokers will often have some extremely unethical terms. These might include tying in the initial deposit until a certain amount of trades have been met turnover requirements. They will include the initial deposit not just bonus funds. Effectively making the deposit their money as soon as it is handed over. This warning includes automated robots and signals, but also managed accounts, where an account manager has promised massive profits.
There is an obvious conflict of interest for these account managers. If you make a long term profit, the brokerage makes a long term loss on your account. An account manager, employed by the broker, is very unlikely to have your trading interests at heart.
While they may argue otherwise, letting someone else trade for you is very likely to end in losses. These managers can also encourage traders to invest way beyond their means, which is particularly dangerous. The risks should never be hidden from you by your broker or account manager. Many of these warning signs are related — this form of marketing again hides the risks — just like the cold callers and account managers.
There are numerous websites, with high production videos that look very appealing. They will suggest making money is easy, possibly even suggesting they copy famous investors.
These are all scams. Any promotion that hides, or downplays, the high risk nature of binary trading is not being honest. Binary options are not a way to make easy money, and should not be sold this way.
This form of advertising for binary options is generally the most dangerous for the consumer. If you encounter marketing of this kind, do not proceed. A funnel is a website that will drive traffic to a broker. As a visitor to that site, you may not even be aware you have been redirected to a broker. The issue here is that the consumer will be passed to a broker, who they know nothing about.
Having visited the funnel, the new customer will get a call from a random broker asking for a deposit. While this may sound odd to those who have not fallen victim to it, the effective selling of the binary options scam by the funnel website, will mean many people are duped. Some brokers will include a line within their terms along the lines of: Unfortunately it will not be worded as clearly as that, as the implications are obvious — they set their own prices. If the broker is the counter party to any trade, and they also set the prices, it will be very very difficult to ever make a profit with that broker.
Clients are trading against the broker, and they decide the closing prices. One of the two parties will make a loss — and it will not be the broker. Research the terms of trading and beware of any references to settlement figures based on anything other than real world prices. So those are some key warning signs that should make any potential new trader stop and question what they are being told.
If you have come across any of the above, identify the broker involved — and trade elsewhere. Even this however, might carry risk. The reason is, as well as the scam operators, there are review sites that are also dishonest.
There are a couple of ways that consumers can protect themselves and find the trustworthy reviews. The first method is in looking at the offerings elsewhere on the review site — if other scams are being promoted, then the reviews are not credible. Ask these question of the site:. The second method is regulation. If a binary option site lists FCA regulated brands as we do! That site must be completely honest about the high risk nature of binary options, and it must have accountable individuals, based in the UK who operate it.
If it does not, then the FCA firms would not allow their brands to be marketed by them. Here however, is another level of complexity. Some binary options brokers have sought to register with the FCA. This is not the same as being regulated by them. A brand offering only binary options will not be fully regulated by the FCA. This is because binary options are currently regulated and licensed by the UK Gambling Commission. In Nadex , a U. On June 6, , the U.
Commodity Futures Trading Commission CFTC and the Securities and Exchange Commission jointly issued an Investor Alert to warn about fraudulent promotional schemes involving binary options and binary options trading platforms.
The two agencies said that they had received numerous complaints of fraud about binary options trading sites, "including refusal to credit customer accounts or reimburse funds to customers; identity theft ; and manipulation of software to generate losing trades".
Other binary options operations were violating requirements to register with regulators. Regulators found the company used a "virtual office" in New York's Trump Tower in pursuit of its scheme, evading a ban on off-exchange binary option contracts.
The company neither admitted nor denied the allegations. In February the Times of Israel reported that the FBI was conducting an active international investigation of binary option fraud, emphasizing its international nature, saying that the agency was "not limited to the USA". The investigation is not limited to the binary options brokers, but is comprehensive and could include companies that provide services that allow the industry to operate.
Credit card issuers will be informed of the fraudulent nature of much of the industry, which could possibly allow victims to receive a chargeback , or refund, of fraudulently obtained money. On March 13, , the FBI reiterated its warning, declaring that the "perpetrators behind many of the binary options websites, primarily criminals located overseas, are only interested in one thing—taking your money".
They also provide a checklist on how to avoid being victimized. From Wikipedia, the free encyclopedia. External video Simona Weinglass on prosecuting binary options firms , Times of Israel , 3: Retrieved January 26, Journal of Business , Retrieved 17 December Federal Bureau of Investigation.
Retrieved February 15, Retrieved March 15, Retrieved March 29, Retrieved March 4, Retrieved 18 May Israel's vast, amoral binary options scam exposed". The Times of Israel. Here's how we fleece the clients". Retrieved October 24, Retrieved February 7, Retrieved 14 January Archived from the original on Retrieved 15 April Commodity Futures Trading Commission.
Retrieved 20 November Retrieved June 19, Retrieved 5 September Retrieved April 26, Retrieved September 28, Retrieved 4 June Retrieved 27 March Commodities and Futures Trading Commission. Retrieved May 16, Retrieved September 24, Retrieved 21 October Isle of Man Government. Retrieved September 20, Retrieved March 14, Energy derivative Freight derivative Inflation derivative Property derivative Weather derivative.
Simona Weinglass on prosecuting binary options firms , Times of Israel , 3: