Binary options are a scam?
Binary options goes by many names. It is called among other things for the digital option, all-or-nothing option, top or bottom option, or simply överunder as the product’s name is listed on the Stockholm Stock Exchange. Unfortunately there are also many who call binary options scam and argues that it is only a form of fraud designed to cheat people out of money.
This is not true.
Binary options trading is a very controlled market with very clear conditions and guidelines. Serious players in the binary options is licensed as a financial instrument within at least one jurisdiction. And if this is the case, it is usually regulated internationally by local government institutions. For example, The U.S. Commodity Futures Trading Commission (CFTC) in the U.S. (A), the London Stock Exchange in England and the Swedish financial supervisory authority on the Stockholm Stock Exchange in Sweden. What you should watch out for is software that promise impossible profit margins, such as the “Swedish approach” and “the aussie method”, these types of scams, you can read more on our site.
Binary options are simply a particular type of investment. It is a form of investment that especially suits people who want to trade with high risk derivatives, and make quick investments towards high-yield under controlled conditions. It is a form of investment that is often used as a natural part of a stock strategy, for example. risk optimization or supplementing of the equities portfolio. Trade with överunder is carried out daily at both the digital optionsplattformar we are looking at Ombinäraoptioner.se which on stock exchanges such as NASDAQ and NYSE.
In short, it is simply incorrect to call binary options scam or scam. Binary options are an option format using smart for increased yield, just like ordinary options.
The Swedish method
Famous Hoaxes in binary options
That’s why binary options got a bad name
It’s pretty easy to see why many people believe that binary options are scams. Everyone knows that the internet is largely populated by fraudsters, and the vast majority of bluffarna look very similar: they promise you an easy way to earn big money in a short period of time and without any effort. We have for example. all seen the infamous “Nigerian letters”. We have read about the many pyramid schemes which recruits members over the internet. We will daily in contact with comment box full of spam about “my cousin earned $ 2500 per hour working from home.” When you see something that promises big payouts without risk or effort, you can be fairly certain that it is a hoax.
But binary options is not an easy way to earn fast money. It is a serious form of investment that requires extensive knowledge and caution to be profitable in the long run. And because digital options trading is done in such a fast pace, it is natural that many feel ripped off after a bad investment. Then it’s simply easier to blame the scams than to try to understand what went wrong.
The Swedish method binary options
We would like to warn anyone looking for this method to trade binary options. A few years ago was developed which was called “the Swedish method binary trade” and it was a trading method that quickly became popular, but which later turned out to be a hoax. The founders behind method got their site hacked and la then down. The reason for that method became so popular was simply smart marketing.
Allegations of fraud is rarely about fraud
The reason why some claim that binary options trading is a scam usually depends, therefore, on one of four things:
They have made an investment without understanding how binary options work and feel cheated when things are not going as expected.
They have not understood the general terms of the broker they use.
People don’t like to be wrong or losing money. Why blame the company or broker instead of admitting their own mistakes.
They were actually exposed to fraud.
To be clear: there are obviously rogue operators in the options trade. Players who are more than happy to steal your personal information and lure you on your money. All industries can be exploited by fraudsters in different scopes, and the financial sector are particularly vulnerable. But allegations that binary options would be a fraud are very rarely anything to do with actual fraud.
In short, as long as you deal with a reputable broker so you can be confident that your money, your personal information and your investments are managed properly. To know more about how fraudsters take advantage of binary options-scams, read on below.
Binary options can be used by fraudsters
According to the CFTC so it is mainly three types of fraud occurring in binary options:
companies which refuse to refund the deposited money,
mjukvarumanipulering which artificially causes loss of investments, and
The first category relates to customers deposit a sum of money to his customer account through a broker or other options trading platform. When customers then are trying to take their money out of the account so refuses platform to repay the money by cancelling their request, refuse to credit their accounts and ignore phone calls and e-mail contact.
The second category is that the platform is software which artificially causes a loss of investment. This for example by arbitrarily extend the expiry time on an investment until that stock price changed and there will be a loss.
The last category, identity theft, means that the platform collects on the customer data (such as credit card and bank account numbers) to steal from the customer.
Fraudsters who use these methods can sometimes be difficult to distinguish from reputable brokers. Especially if you do not already have the skills and knowledge of binary options financial activities. Fraudsters may have websites that are similar to other reputable brokers, they may have language and marketing that seems reassuring and professional, and they may have a staff of salespeople who declares one of the service’s reliability and seriousness. That is why it is important to review potential broker carefully before you write up on a service to trade binary options. In the next section, you can read about the approach we use to ensure the reliability of the binary optionsplattformar.
How we review brokers
Because binary options trading is a financial activity, and therefore is prone to some fraud, we review broker carefully before we choose to recommend them here, we will explain how this review goes to. This on the one hand, to ensure that our recommendations are reliable, but also to so well experienced and new investors to do their own research.
Our review of binary options brokers is performed in three distinct steps. First we check that the broker is properly licensed and regulated in any jurisdiction. Then we check the broker’s reputation in the financial institutions. Finally, we look also at the user’s own experiences of trade via the broker’s platform.
Below you can read more about these three steps.
Control of the broker’s license
The first thing we do when we look at a broker is to check its license as a financial instrument, as well as look at what jurisdictions broker is regulated within. License and regulation tend to usually be offered directly to the broker’s site, and if that information is available, it is a good indication that the broker is a serious player.
It is very commonly to binary trading platforms have their license issued from the Cyprus Securities and Exchange Commission (CySEC). This is due to the fact that Cyprus was the first country to regulate the trading of digital options on the internet, which has led to many brokers sought license and moved its operations there. Is a broker licensed by CySEC so they should have a license number, and that number should be searchable in the CySEC’s database here: CySEC Regulated Entities. Since Cyprus is a member of the European Union means a license issued by the CySEC makes it possible for them to act in almost the whole of Europe, with some possible exceptions. In such cases, as in the case of a regulatory responsibility at regional financial institutions, for example. The Swedish financial supervisory authority (FI) in Sweden.
Shortly after that the CySEC began regulating binary options as a financial instrument, followed by Malta and regulate now binary options trading through the Malta Financial Services Authority (MFSA). Their license database can be found here: MFSA Licence Holders. As the investment form has increased in popularity, it has also been discussed in England that binary options should be regulated through Financial Conduct Authority (FCA). It might mean that licences will be issued by them in the near future.
It has gone out a warning if the broker? Binary options scam
The next step is to check if it assumed any warning if the broker in official channels. If we find a warning so we make it clear to us exactly what the warning is in effect. Warnings are issued usually by regional financial institutions in cases of suspected fraud or other rule or law. These warnings are shared with other financial institutions, so that investors can stay up to date on what operators you should avoid dealing with.
When we check the warnings emanating from the warning list published of the FI, which you can find here: FI’s Warning list. We are looking for through the list after the broker’s, or its owner’s company name to ensure that they do not carry out any suspicious activities or have been stripped of his license.
Complaints about the service
The third step is to investigate the broker’s reputation among users. We are looking for through reviews, forum discussions and comments field after complaints about the service. We look on the one hand, to the volume of complaints that arise, but also on the type of complaint that usually occurs.
If the broker has received many complaints, it can be a warning sign that there is a serious platform. But as we mentioned earlier, it is common for users to call binary options for scam for reasons other than that they were victims of an actual fraud. For this reason, we must also value the complaints from a number of perspectives:
How long the broker has been active. A broker who has been working for a long time, especially since the binary options first came on the market, have had a long time to accumulate complaints – whatever they are legitimate or not.
Date of the complaint. Complaint issued early in the broker’s activities may well be an indication that they are serious business. On the other hand, we must work on the basis of updated and relevant complaints reflects the broker’s contemporary activities. A clumsily handled the company, after all, can be developed together with innovation, new technology and experience.
Protect yourself against rogue traders
In order to avoid fraud when you are trading binary options are subject to the same principles for all financial activity on the internet: shop only with reliable platforms. Before you invest via a digital options trading platform, you should:
Understand how binary options work. You should never invest money in areas that you do not understand.
Enquire. Ask experienced traders for tips on good platforms. Also feel free to contact the customer service of the company you want to invest. A professional staff where they will answer your questions can help you assess whether a serious broker.
Verify the license. If your company is not licensed or regulated in your jurisdiction, you should probably choose a different broker.
Check the address of the company. The company is based in a country with unclear and uncertain financial laws and regulations, it is best to find another platform.
Search for information about the company. They have received positive press from respectable news organizations or financial organizations, they are probably serious actors.
Find reputable operators via services like Ombinäraoptioner.se. We always look to our visitors to reputable brokers who handle your investments in a safe and secure manner.
Good luck with your investments!