Is it Safe to Trade Binary Options?
Many of the requests we receive on a daily basis are from those with limited experience trading forex and CFDs. As such, we are often asked questions about the legitimacy of certain trading products. Lately, we’ve received several inquiries pertaining to the legality and safety of binary options trading.
A common question we are asked is whether or not it is safe to trade binary options? In our opinion, the answer is a very firm NO. We do not believe it is safe to trade binary options, nor do we think that binary options are a legitimate investment product.
Why We Don’t Believe Binary Options Trading is Safe or a Legitimate Investment
It’s important to emphasize that binary options trading is now illegal in the United States and Europe, with many regulators in other parts of the world following suit. For those who are wondering if binary options trading is safe, one of the best reasons to avoid binary options trading is to consider the fact that most world regulators have chosen to ban or prohibit binary options completely.
No matter what sales pitch a binary options broker may use to win your business, it’s important to remember that binary options trading is illegal in almost all parts of the world. Because regulators in places like Europe and North America have banned binary options trading, the only binary options brokers that still exist are unregulated and unlicensed, making it an unsafe investment.
Binary Options Are Not a Real, Legitimate Investment
Due to the nature of the product, the trading of binary options isn’t profitable for nearly all investors. The reason is that binary options brokers intentionally skew the outcome of each trade to favor the broker, not the client. Even if a binary options trader were to get lucky with a few profitable trades, the broker would ensure that any trades in the future would end up at a loss to keep the profitability of the binary options broker consistent. For this reason, one can never become a successful binary options trader. Furthermore, there is no such thing as a professional binary options trader.
Investors Should Be Aware of Binary Options Fraud
We strongly discourage investors from opening an account with a binary options broker. The main reason behind our suggestion is that nearly all binary options brokers are unregulated. This means that there is no level of protection for the investor. Should a binary options broker cheat an investor or simply disappear with the funds, there is no legal recourse for the investor to take. In essence, it is simply not safe to trade binary options.
Forex Consulting – Guidance & Resources for New Traders and Investors
If you are interested in learning more about trading forex & CFDs, then we recommend avoiding binary options altogether. Because it is not safe to trade binary options, those looking to trade FX & CFDs for the first time should consider opening an account with a regulated forex & CFD broker.
Our group of FX industry consultants posses a strong network of regulated forex brokers around the globe. Contact us today to speak to a consultant who can guide you in selecting a forex broker that best suits your needs. We look forward to hearing from you!
Beware of Binary Options Wealth Recovery Scams
If You Lost Money Trading Binary Options, Beware of Wealth Recovery Companies
We are here to warn any former binary options traders to steer clear of firms purporting to offer wealth recovery services. Due to the demise of binary options brokerages, many of these former shops have turned themselves into businesses pretending to be on the side of the client. Any business offering to recover money lost to a binary options broker via a chargeback or refund is attempting to take advantage of former clients who are desperate to try to recover their losses. Don’t be fooled, these companies are not on your side!
How to Tell if a Binary Options Wealth Recovery Firm is a Scam?
1) You are asked to pay money up front.
2) You called the phone number on the website and it didn’t work or it wasn’t the same company found on the website.
3) The owners and directors of the business are not easily found on the website or non existent.
4) The company claims to be regulated but you cannot find their business name listed on the regulator website.
5) A Google search of the company addresses doesn’t appear correct.
6) There are generic reviews of the company that sound like this: “I lost money trading binary options, but thanks to (Company A) I received my money back, email them here: (Email Address)
How to Get Your Money Back From Binary Options
If you lost money trading binary options, we warn you to stay away from any wealth recovery firm, especially those asking for upfront payments. Unfortunately, if you suffered a financial loss by trading binary options, there is no way to recover these funds back. Any company promising to recover your funds is just a binary options firm in disguise, trying to scam you one more time!
Binary Options Fraud
The chances of successfully receiving lost money from a binary options lawyer or wealth recovery firm are incredibly low. Consider this recent example, where the operator of wealth recovery firm based in the United States was sentenced to three years in prison for pretending to be an official of the SEC. There are still plenty of fake wealth recovery firms out there that have yet to be exposed. We warn anyone engaging these firms to steer clear of them, as they are simply pretending to be on your side.
Why Is Binary Options Trading Illegal? & Why are Binary Options no Longer Available to Investors and Traders?
Binary options were once an incredibly popular investment product, often promoted as a complementary service to a forex broker’s website, or as a standalone product. Although many independent binary options brokers could be found during the height of its popularity, there was always a close relationship between forex trading and binary options because both services centered around the foreign exchange market.
A Brief History of the Binary Options Trading Industry
Similar to the growth forex & CFD trading, binary options grew in popularity as online trading of all kinds took the Internet by storm in the early 2000s. During this time period, forex trading was loosely regulated, meaning it was also very easy for one to establish a binary options trading firm. As a result, binary options brokers began to quickly pop up alongside forex brokerages.
By 2010, there were hundreds of binary options brokers spread across the globe. It’s worth highlighting that the majority of these binary options brokerages were unregulated, yet this take away from the popularity of the product. In fact, the growth of binary options trading was so large that by 2010, one could find a variety of binary options brokers occupying booths at many of the FX and affiliate conferences held around the world.
Why Binary Options Trading Faded in Popularity
In the last couple of years especially, the party has come to an end for the binary options industry. In our view, the single biggest blow to binary options trading came from in the form of The European Securities and Markets Authority, known more commonly as (ESMA). Due to the massive number of complaints and overall negative reputation of binary options brokerages, ESMA decided to prohibit the marketing, distribution and sale of binary options services through the European Union. With Europe being one of the major hubs for FX & binary options trading, this decision essentially decimated the entire industry.
It’s important to note that binary options trading had been illegal in the United States and Canada for some time, even prior to the ESMA changes. With ESMA setting the industry standard by making it illegal to operate a binary options broker in Europe, regulators in other parts of the world such as Australia and Asia began to follow suit. Given the sweeping trend of these regulatory changes, we can confidently state that for all intents and purposes the binary options industry is dead.
Why Were Binary Options Banned in Europe and Other Regions?
The main reason that binary options were banned in Europe has to do with the nature of the investment product. In essence, binary options trading skewed extremely in favor of the broker to a point where investors / traders could not profit from it. Unlike forex trading, which has proper regulation for both dealing / market makers and non dealing firms (STP) brokerages, binary options brokers are not subject to such regulation. Essentially, all firms offering binary options were simply market makers with a formula that ensured investors would rarely, if ever profit.
For the reasons above, we strongly discourage investors from considering unregulated binary options products. It’s important to highlight that there is no legal recourse or overall safety of funds when opening an account with a binary options broker. Furthermore, the chance of success is minuscule at best when trading binary options. The reason is binary options brokerages are specifically trying to take advantage of their client base.
Forex Consultation & Expertise – Let Our Team Guide You In Selecting A Forex Broker to Trade With
If you are new to investing, we believe that forex trading is a much better choice than binary options. Unlike binary options, forex trading is regulated, there are many brokers offering safety of funds to clients, and far more resources available to new traders.
Feel free to get in touch with our consulting team for guidance on partnering with a reputable forex broker. To learn more about the advantages of forex trading, simply contact us today!
