Today I want to address a question we get asked on a fairly regular basis – are binary options a scam?
Obviously, as a reasonably new trading strategy, some people are concerned with the legitimacy of binary options as a trading instrument. Rest assured folks, they are definitely legitimate. They have been available as a retail instrument (meaning Mr and Ms Average can access them) since the Chicago Board Options Exchange added them in 2008. Prior to that they were only available for high net worth clients – think banks & big business etc.
Since 2008, there have been a very large number of binary options brokers/platforms enter the market, and it’s possible that this may be the origin of the question “are binary options a scam?”
Binary options are becoming very popular, because of the ease and simplicity they offer, as well as the risk management factor. As with any popular product or service, you will find all sorts of people trying to jump on the bandwagon and cash in. Don’t believe me? Google “binary options” and see just how many brokers there are out there trying to get your business! I guarantee you will be bombarded with paid advertisements on any search involving the keywords “binary options.”
It’s an unfortunate fact of life however, that not all binary options brokers are created equal. There will be a wide variation in product standards and service, which is to be expected when there are large numbers operating in the same small marketplace. It seems that in the binary options market though, the gaps between the leading brokers and the rest of the field is somewhat larger than you might normally expect.
Complaints range from a lag in trade execution times, incorrect pricing (live market rates) and lack of customer support to problems accessing or withdrawing funds.
What it comes down to is researching your broker/platform before you open an account and invest your hard-earned funds with them. Any reputable broker will have company information freely available on their website – including contact phone numbers. Check out their withdrawal policy. Read all the fine print. You MUST do your due diligence or suffer the consequences.
Oh…and beware the bonuses – these will usually lock ALL your funds away until you have traded up to 30 x the value of the bonus. This means if you accept a $500 bonus, none of your money is accessible until you have traded a volume of $15,000. Don’t fall victim to an aggressive marketing campaign to lock away your money. Accepting a bonus is something you should only do if you will not need to have access to those funds in a hurry.
There are a number of reputable brokers and platforms who provide a quality service but it’s up to you to do your homework.
Binary options themselves are not a scam, they can be an excellent way to create income and wealth – but you need to choose your support team carefully.