This question is quite common among investors, irrespective of their trading experience. Many binary brokers are regulated by legit authorities while others don’t.
This fact is undeniable that binary options return a huge profit if the right broker is chosen and used properly, but the risk involved is very high. One wrong step will make you lose all your invested money.
But can binary brokers steal your money? Or make you lose money in order to profit themselves? This is a serious point at issue which is worth considering.
Let’s look at some most common allegations and complaints against the brokers.
Basic complaints against Binary Options brokers
#1 Identity theft
It is a crime of pilfering someone’s information, personal or financial, and using it to perpetrate scams and frauds. This includes using one’s identity to make financial transactions.
In binary options, identity theft is a serious problem. Many complaints are made against them that brokers are obtaining their customer’s information like credit card data and using them for unauthorized use.
#2 Non-Withdrawal of funds
Traders have alleged that brokers ask them to make more deposits in their accounts; otherwise, failure in adding funds will cause additional maintenance charges. And the customers often comply with this.
But the problem starts when the broker stops the extraction of funds. Customers could neither withdraw their deposited money nor the profit sum. Upon contacting customer support, brokers are contended to avoid their emails, calls and never respond, making them lose all their money.
#3 Make traders lose purposefully
It is claimed that brokers use some special software or computer-generated programs in order to falsify the payouts. The most common instance is when the trader is winning the trade, brokers prolong the termination time up until it turns into an unsuccessful one.
Are all Binary brokers scam?
Either case could be possible; you may or may not get scammed. In many incidents, the traders are being scammed while others enjoy all the facilities with high security. This means that it all comes down to choosing the right broker.
Many brokers run a real and sincere business. They will never do such acts as stealing money or any personal information. Their encryption and security are high and provide genuine payouts.
The trust issues arise when the broker offers highly unexpected returns. For example, they will proclaim to give huge payouts for a small investment. This lures the traders, especially the newbies.
Without conducting research on the brokers, they trade their money. Soon they realize that in greed, they added more and now are facing losses.
Can your money get stolen?
Your luck is not at fault every time. Even if you are a seasoned trader, the risk is always there in buying and selling of assets. You can lose your trades fair and square, but this is the case with genuine brokers.
With the forged ones, it is quite common to get your money stolen. Your money can be taken away from you in a snip of time, and you won’t even realize it by the brokers running a con business.
There is a number of ways through which you can get scammed.
#1 Falsification of facts
As a trader, it is your right to get the full and real information about the brokerage firm. Misrepresentation or hiding data is a kind of fraud. Avoid the broker if they have falsified or have provided a piece of distorted information about them.
Omitting any vital information regarding trading, payment, etc., is outright lying and deception. If you invest your money with such a broker, the chances are that your money will be lost.
#2 Asks you to make extra trades
The more you trade, the more they will earn as they are paid on commission. Asking you through their policy to make excessive trades is beneficial for them but is a lost cause for you.
Every broker knows the fact that you might win maximum trades, but in the overall situation, you will suffer the loss more than you won. And hence, they ask you to agree on their policy agreements in minimum trade volume.
#3 Misappropriation of funds
The most straightforward type of stealing is when the broker, on purpose, misappropriates your funds. They will make use of their position and fiddle with your deposited money that too in a refined manner.
Newcomers or elderly traders are more prone to become victims of this theft. They do not understand the terms and conditions of the platform. Brokers take advantage of this dimness and make a profit for themselves.
#4 Making you buy an asset at higher rate
While buying, you get the rate of the asset. Brokers could take the low price for themselves and show you the increased one. When you buy the asset, you are paying more than its actual rate.
This is known as the front running of transactions. Here, the broker, upon getting your order, gets the best price of the asset by putting their order first and will put your order after the price has increased.
This way, you are losing your money, or simply put, your broker is stealing your funds.
How to recognize fraudulent Binary Options broker?
One thing which is common for fake binary brokers is that they try to build trust by giving forged information on their websites.
To make themselves look legitimate, they will claim to have been headquartered in countries like the USA or any developed country. Their official site will say about awards and recognitions they have achieved.
To increase their credibility, they will have some fake social media profiles and will insert some testimonials, which will give the customer a feeling of reliability. And so much more.
How to avoid such brokers?
You can easily avoid getting scammed by these brokers. Inspect the broker thoroughly. Check the register of the regulatory body from where they have claimed to get the authorization, their license status, and everything about its background.
Read their terms and conditions and all the policies. Look for some genuine reviews from professionals. And if you could not find anything needed for verification, do not trade with them.
It might be a lengthy process, but your money is in your hands, and only you can decide how, when, and where to put them.
Can you win without getting scammed?
The risks are though high; you can easily win your trades. For regular gains, you have to pay close attention to the price charts, learn about different patterns and use various indicators.
Take into account all the previous records and the strengths. After acquiring all the knowledge, another variable is the “luck” factor. Like in other forms of gambling the fate is important.
These variables will help in long run success. Again, the use of a broker who is honest is the topmost priority.
How to choose the right broker?
There is a large number of brokers offering their services in the market, having the right one within your budget and which is well regulated or admired by professional traders.
Following are the interrogation points that are to be enquired:
#1 Regulation of the broker
In regulated binary brokers, your funds are guaranteed to be safe. This is because the regulatory authorities have some guidelines that are to be followed by the brokers. For instance, they ask them not to fiddle with 100% of the trader’s money.
This surety is not provided with the unregulated brokers. There always lies a risk of brokers getting bankrupt. When this happens, in the unregulated ones, it is hard to get your deposits back, while the regulated brokers will give you more protection.
#2 Financial assets
Some brokers offer you more than 300 assets on their platform, namely commodities, currencies, indices, stocks, or cryptocurrencies. Take the broker who deals in assets of your interest and has vast choices.
#3 Indicators and other tools
Indicators are the main parts of the binary platform. Without them, reading charts becomes very hard, and the prediction can disturb. More indicators mean more accuracy. Other than these offerings, different types of graphical tools are better.
You will find educational material in many brokers as well. They will offer video tutorials, training material, master classes, one-on-one guidance sessions, etc. Newcomers should consider this feature as it will help them in refining their skills.
#4 Trade Options
There are different types of trade options. You will see “call and put,” “60 seconds”, “ladder,” “buy and sell,” etc., types of contracts offered by the broker through which you can enter into trade.
The vanilla trade types like the “call/put” are generic, but they reduce the influence which a trader hold over his position. At the same time, others like “ladders’ or “Long-Term Equity Anticipation Securities (LEAPS) offer high prospects of contracts.
Vanilla trading is simple and efficient but not enough, especially for the traders who want to expand their trading realm. Such traders must look for different options of contact types.
The binary options brokers are getting heed from people all over the world, and at a fast pace, they are extending their boundaries, getting new traders every day from different countries.
Although binaries are a good way to earn for traders, many brokers are doing the opposite and making money from their own customers, which is unethical and morally wrong.
Binary options brokers can steal your money but only when you let them do so. Never overlook anything when it comes to financial matters. Take note of your broker and trade only when you verify their legitimacy.