Binary Options Scam: The Facts
The binary options scam has become quite rare, but it does still exist. It’s important to always closely examine a broker before you make a financial deposit with them to ensure that you do not fall into the trap of a binary options scam. It is also important to be able to tell the difference between processes which can sometimes be included in scam reports and scams. Here we provide you with all the facts.
What is a Binary Options Scam?
Due to the growth of the internet, the number of active scams has decreased significantly over the years. With traders quickly being able to share information with others around the globe, scam brokers are easily caught. But this does not mean that you are not at risk in becoming a victim of a binary options scam.
A binary options scam comes in several forms:
• Non-payment of monies or profits owed to the trader – this could occur as a result of the mismanagement of broker funds, or simply because the broker established a platform with the direct intention of robbing traders of their deposits and profits.
• Incorrect financial data within the platform – for example, in a scam platform the trade could end out of the money based on the financial data being provided by the broker.
• Altering of payout percentages (which should be fixed) or the profits that come from successful trades would represent another form of binary options scam.
The above are key indicators of a binary options scam. So how do you make sure that you do not fall victim to a scam?
How to Avoid a Binary Options Scam
Broker reviews are one of the easiest tools to use in determining whether or not a broker is reliable. Since most binary options brokers opened for business several years ago, there should be plenty of information available in regard to a possible binary options scam.
Other ways are:
• Check reliability of financial data – a source such as Reuters could show that the trade was actually supposed to end in the money. Be sure to check which data feed vendor the broker uses prior to comparing financial data.
• Close monitoring of the account – contact the broker right away should you notice that the payout percentage has changed after the trade has ended, or that an incorrect profit amount is listed.
Understanding the Terms & Conditions
Many binary options scam reports are the direct result of the trader not fully understanding the terms and conditions put in place by the broker. Traders are always advised to read these thoroughly prior to completing the registration process and contact the customer services team with any questions.
The following are examples of processes that are often included in binary options scam reports, but are actually not scams:
Slow Withdrawal Processing
This is one of the most common complaints. Many traders expect their profits to be paid to them immediately after issuing a request. The truth is that the total payment processing time can range anywhere from a few business days to well over a week. Binary options brokers will often include their payment processing time in the FAQ section of their website.
Payment of Bonus Funds
Brokers will have very specific rules in place in regard to the payment of bonus funds. Most will require the trader to be active for a period of time. It may also be necessary to invest the bonus funds and transform them into actual profits before they can be withdrawn. Reading the rules associated with the payment of bonus funds will prevent any misunderstandings in regards to a binary options scam.
Minimum Withdrawal Amounts
Some binary options brokers have a minimum withdrawal amount in place. This rule is often used to cut down on the amount of funds spent by the broker in issuing payments. There are some brokers which do not have minimum amount restrictions. However, those that do will clearly list these on their website.
Most brokers will offer one fee-free withdrawal each month. After that, fees may be charged on the withdrawal of profits. Though withdrawal fees can be frustrating, they are not a form of true binary options scam. Withdrawal fees, if any, should be listed either within the FAQ section of the broker website, or within the banking area of the platform.
The need for the trader to prove his or her identity prior to the first withdrawal being processed is a rule that all brokers have in place. Not only is this not a binary options scam, it is actually done for the protection of both the broker and the binary options trader. This process works to prevent money laundering and the use of stolen financial instruments such as credit cards and bank account numbers.
Now that you know have all the relevant information, let’s examine specific brokers and determine the possibility that they are associated with any binary options scam.
So, what is an actual binary options scam?
Scams actually come in several forms. Some are easier to detect than others. One of the most common, and highly considered the worst form, is the non-payment of monies or profits owed to the trader. This could occur as a result of the mismanagement of broker funds, or simply because the broker established a platform with the direct intention of robbing traders of their deposits and profits.
Another scam could be in the form of incorrect financial data within the platform. For example, in a scam platform the trade could end out of the money based on the financial data being provided by the broker. A check of a reliable financial data source such as Reuters could show that the trade was actually supposed to end in the money. Be sure to check which data feed vendor the broker uses prior to comparing financial data.
Altering of payout percentages (which should be fixed) or the profits that come from successful trades would represent another form of binary options scam. A close monitoring of the account will be needed should the trader suspect that the numbers are not right. Contact the broker right away should you notice that the payout percentage has changed after the trade has ended, or that an incorrect profit amount is listed.
Now that you know what is or is not a scam, let’s examine specific brokers and determine the possibility that they are associated with any binary options scam.
The only complaints to be found in regard to this broker are of the non-scam variety. These complaints could likely have been avoided by reading the terms and conditions. OptionFair has been in business since 2010, and is known for its transparency, reliable platform, and reliable payments. There is nothing to signal any OptionFair scam.
OptionFair Review – Visit OptionFair
Banc De Binary Scam
Any talk of a Banc De Binary scam is usually related to their rule of requiring traders to trade a specific volume prior to requesting a withdrawal. This immediately causes traders who have not read the terms and conditions to start talking about how Banc De Binary has scammed them. In reality, Banc De Binary is one of the finest brokers in operation today and certainly is not part of any scam activity.
Banc De Binary Review – Visit Banc De Binary
This broker has been in operation since 2008, allowing plenty of time for any EzTrader scam to be exposed. There really are no major complaints to be found in relation to this broker, and therefore no reason to assume that any EzTrader scam is in place or will be occurring in the future.
EzTrader Review – Visit EzTrader
EmpireOption has been the focus of some scam talk. This is quite common with younger brokers who have yet to completely prove they are reliable. Further investigation shows that no EmpireOption scam exists, with the problem instead being of the common variety and combined with the impatience and anxiety that often comes from partnering with a broker that is one of the newer binary options brokers.
EmpireOption Review – Visit EmpireOption
This broker is one of the most popular, and as such, any complaints seem to be magnified. Since 24Option is highly discussed online, it did not take long to get to the bottom of scam reports. The problems seem to be quite common and do stem once again from a failure to understand how payments are processed.
24Option Review – Visit 24Option
TraderXP scam discussions can be found online. Nearly all of the complaints stem from the lengthier withdrawal time frame offered by this broker. As previously mentioned, all traders want their payments issued quickly. Though TraderXP is certain not a scam broker in any form, those who partner with them will need to accept the rules in regard to withdrawals.
TraderXP Review – Visit TraderXP
There were a few problems noted with the iOption platform financial data in the past. This quickly had many talking about an iOption scam. The most likely cause of the errant data was a flaw in the system, though we cannot know that for certain. What we do know is the appropriate corrections were made and today iOption is considered to be a reliable broker.
iOption Review – Visit iOption
Owned by the same company that owns EZTrader, GlobalOption scam reports do exist but are once again of the basic misunderstanding variety. Apparently, GlobalOption has worked hard to provide a higher level of customer service, as there are very few recent complaints to be found. There is no GlobalOption scam in place, so feel free to partner with this broker.
GlobalOption Review – Visit GlobalOption
Though OptionXP is one of the smaller binary options brokers, they have been in business for several years. This is plenty long enough to be able to spot an OptionXP scam. This broker has been able to maintain an excellent reputation with traders and should be considered a viable option for trading.
There has been some talk about an OptionBit scam of the incorrect financial data variety. In reality, OptionBit draws its live financial data feed from Reuters, which is considered to be a completely trustworthy source. It is not known exactly why this OptionBit scam rumor began. However, a quick test of the platform reveals that there is no truth behind it.
OptionBit Review – Visit OptionBit
The most common complaint in regard to AnyOption is the need to meet a certain trade volume prior to being able to withdraw bonus funds. This is not an AnyOption scam, but simply a matter of reading the rules associated with bonus amounts. This broker does offer stellar customer service and a clean reputation. There are no indicators that an AnyOption scam is taking place in any form.
AnyOption Review – Visit AnyOption
OptionRally is one of the smaller scale binary options brokers and as such as managed to do very well in handling any complaints. Though there are no indicators that an OptionRally scam in any form is in place, they do deal with the same common complaints that other brokers deal with. What makes OptionRally stand out as a reliable broker is how they handle these through their stellar customer service department. Partner with this broker with confidence.
OptionRally Review – Visit OptionRally
VIP Binary Scam
This broker opened for business in 2011 and remains one of the younger binary options brokers. Though it could be hard to determine whether a VIP Binary scam is 100% not happening, a search for any serious complaints turns up nothing serious. Younger brokers such as VIP Binary are always considered to suspicious and often referred to as scam brokers. Though this is unfortunate for new brokers, it is just part of the process. Over time, reliable brokers such as VIP Binary will be known as such.
VIP Binary Review – Visit VIP Binary
Binary Options broker, OptionsClick has been in operation since 2010 and since that time has been offering reliable service. It is difficult to find any legitimate complaints pertaining to this broker, let alone anything that would indicate an OptionsClick scam. When OptionsClick first launched, there were some complaints about their incomplete FAQ section. However, this problem has since been handled.
OptionsClick Review - Visit OptionsClick
TradeSmarter is considered to be one of the veteran binary options brokers. In business since 2008, this broker has proven itself to be extremely reliable. Like all brokers, this one experiences the occasional disgruntled trader. However, any TradeSmarter scam seems to be completely out of the question. This broker has simply been providing a great platform and customer service for too long for anyone to assume otherwise.
TraderSmarter Review – Visit TradeSmarter
Binary360 has only recently launched in late 2012. It will take some time before the declaration that no Binary360 scam exists. As with most young brokers, expect to see some complaints while this Binary360 works through the kinks and moves on to be considered a reliable broker. While there is nothing to indicate any Binary360 scam at this point, traders are advised to check for scam reports online periodically to see if anything has changed.
Binary360 Review – Visit Binary360
Terms and conditions are squarely at the root of several XPMarkets scam reports. Within these terms and conditions is a section that states that a specific volume of trading must be completed prior to withdrawing profits. Is this clause desirable? That depends on the trader. What is clear is that XPMarkets can set the rules however they wish and this part of the terms and conditions in no way indicates a scam. Always read the terms and conditions prior to partnering with any binary options broker.
XPMarket Review – Visit XPMarkets
The main complaint in regard to WinOptions has been the inability to withdraw funds. However, these complaints are not related to any WinOptions scam, but are instead the direct result of traders not understanding that a minimum withdrawal amount of 25USD or EUR is in place. This minimum withdrawal amount is quite low, which makes it all the more unfortunate that a WinOptions scam is being spoken of. With time and understanding, this matter should be cleared up as this broker is reliable.
WinOptions Review – Visit WinOptions
No serious GTOptions scam reports are to be found. This broker does suffer from some, “too good to be true” reports due to the higher profit percentages they offer. By offering percentages as high as 90%, some traders immediately feel as if a scam is taking place. In reality, some brokers are willing to accept lower profit margins in order to remain competitive. This fact does not mean that any GTOptions scam exists.
GTOptions Review – Visit GTOptions
Another veteran binary options broker, IkkoTrader has proved itself to be extremely reliable. This broker has been in operation since 2009, which means that any IkkoTrader scam would have certainly be brought to light by now. In addition to being considered extremely reliable, IkkoTrader offers a platform and features that traders love. This broker is one of the best, so feel free to partner with them.
IkkoTrader Review – Visit IkkoTrader
Cedar Finance Scam
Cedar Finance scam reports pertain to the amount of time it takes to withdraw funds. These complaints are not uncommon, as many traders do not take the time to read just how long withdrawal times will be. The only other complaints were related to Cedar Finance being “nothing more than a gambling website.” This is not an uncommon statement from traders who do not understand how binary options trading works. Of course this is no indicator of a Cedar Finance scam.
Cedar Finance Review – Visit Cedar Finance
TradeRush got off to a rocky start, but has since rebounded to become on of the most beloved binary options brokers in operation today. Problems with lengthy withdrawal times plagued the broker initially. However, corrections have since been made. It took some time for TradeRush scam reports to fade away, but the hard work put in by the TradeRush team has allowed them to do what few brokers have been able to do – persevere. Today, there is no reason to not feel confident when partnering with this broker.
TraderRush Review - Visit TradeRush
Fear of any binary options scam can quickly be alleviated by selecting a broker which is considered to be upstanding and reliable. Feel free to partner with any of the above listed brokers with confidence. Binary options scams will always be possible. Fortunately, we now have all the tools needed to spot these quickly and steer clear of any brokers that are not operating in an ethical manner.