10 Ugly Truths About Binary Options Scams

10 Ugly Truths About Binary Options Scams truth about binary options

 Are you the kind to gamble on the flip of a coin? It’s a very simple bet: Yes or no; a binary choice. And, actually, flipping coins isn’t the only way to make such a simple investment. Even when dealing with stocks or gold, one can invest in binary options. For a lot of beginners, this is a popular route, since it is fairly easy to understand and manage; but, unfortunately, like a lot of investment schemes, there are tons of scams out there that you must watch out for.

A huge downside to binary options that makes it so fertile for scams is that it is a zero-sum game. You bet on whether a certain condition will be true (say, the price of gold will be above $1000 at 3:00 PM on Monday), and you buy that option. If it becomes true, you receive returns on your investment, if it isn’t, then you lose your whole investment. It is all-or-nothing, and if you make money, this necessarily means someone who bought the opposite of your particular option will lose money. In a lot of ways, it is closer to informed gambling than actual investing.

If you do indeed decide to invest in binary options, take heed. Look at these ten aspects of binary options scams and make an informed decision before you gamble:

1) Your biggest liability is your inexperience.

 Sure, you can get into trading binary options as a complete beginner, but remember that unlike other kinds of investing, you are basically pitting yourself against opponents. Being so uninformed, as you will be in the beginning, can you really outsmart professional investors who have been working in finance for years?

-Side note: I have invested $350 in binary options and lost it in less than an hour. When you first enter your personal information and press SEND, you immediately get a call. The person on the other end is very well trained. He/she tells you that they will personally train you and help you make money. This isn’t true and please, don’t fall for it. Someone called me a few months after I had lost my money. I believe that the only reason why they called me was because they noticed that I wasn’t spending anymore.

2) Good luck beating (or predicting) the market.

Trying to predict the direction of a (more or less) free market is a fool’s errand, essentially, at least when you’re dealing with the tiny day-to-day fluctuations, which is what most binary options rely on.

Side note: I looked all over the internet to see if there was a “system” that was put in place that could teach me how to predict the market. I found something but guess what? This person was trying to get more clients to join their “business”. Of course, if I signed up, he would make a “cut” of what I would spend.

3) The house always wins.

You know who probably makes consistently the most money in binary options? The sites that manage to recruit newbies into joining and blowing their money on a gamble. You can bet that the odds are stacked against the user and skewed in favor of the site; for example, their rules may enable the site to receive more money when they “win” than when their user does—they make the rules, after all.

4) The illusion of control.

While having a good day or a good week, it can be easy to underestimate how little control you actually have over how much money you make. Probability, rather than skill, rules the day. It’s like going to the casino, probably even worst.

5) I win, you lose.

You can tell the difference between investing and gambling because investments are usually the result of creating value, or fixing an inefficiency in the market—for example, when one lends money to a producer who then will pay back with interest, or when one buys a house, improves it, then sells it for a higher price; in these sorts of cases, all parties involved “win” and receive benefit. Gambling, on the other hand, doesn’t create any value, but merely shifts money around from one person to another based on random chance. Guess which one of these categories binary options falls into?

Good investments are rarely, if ever, a zero-sum game where one entity wins and the other loses.

6) Jackpot addiction.

 Just like any other form of gambling, binary options can be addicting, and the scammy sites that sell them are counting on that. Don’t put yourself into that vulnerable position unless you have money to burn.

7) Unregulated trades.

This may not be a concern for you, but you should at least be aware that most of these binary options sites are unregulated, so they can often do as they please and get away with it. Many times you have no recourse if you get scammed.

8) Too good to be true.

 Not all binary options sites are complete scams (in that they promise something other than a gamble), but it’s very easy for “investment” sites to swindle people out of their money. If the site is offering any kinds of guarantees of easy money, you can be practically sure it’s a scam.

9) Range of the moment.

Unlike a true long-term investment, you make money only once, and it is purely active income.

10) Meaningless.

It may seem like a minor point, but like all windfalls, even if you make a lot of money, you didn’t learn much from it. The more that you involve luck in some money-making scheme, the less skill that you have the privilege of acquiring during the process. Good investments are more than just monetary, they teach you something important, and so they are also an investment in yourself. Wouldn’t you rather spend your time on something more enriching than gambling?

No matter how you slice it, barring unusual luck, you’re probably not going to make money—rather, in all likelihood, you will lose it—if you trade in binary options, especially if you are inexperienced. If you’re looking to make money, it’s probably best to focus on creating value; that’s nearly guaranteed to pay.

Take a look at these 20 people who ARE making money online.

12 comments on “10 Ugly Truths About Binary Options Scams”

  1. Samuel Reply

    Hey there, Great post on binary options scams. I also done binary options before and I lost a total of $200. I can relate with you when you say someone will call you, they call me too. It was so frustrating until I had to block them. Like you said, it’s more than investing than gambling because it has 50% chance to win or lose. I would say only you have extra money to try your luck, you can make a living with it.

    Samuel

    • SJB Reply

      Hello Samuel,

      I am not convinced that someone can make a living with it. Like you said and everyone else here is saying, unless you have a lot of money to lose, this is a no-win situation. It’s a horrible feeling to lose money that we have worked so hard for.

  2. Marcus Reply

    I find these kind of gambling schemes very scary. Years ago I lost a bunch of money by doing online gambling. I came across a method, I don’t know if you’ve heard of it. It’s where you double your bet each time, so that when you eventually win you will cover your previous losses. The problem is, there is every chance you could go on losing for many turns in a row and lose a lot of money.

    These binary options sound like they are more calculated than what I just described, but they are still risky. As you say, your inexperience can be the death of you. So how does someone become experienced doing something like this? By having a lot of money to waste to begin with?

    • SJB Reply

      You bring up a great point Marcus. I don’t think that one can develop a “gambling” skill. I believe that these companies are there simply to take our money. Yes, one could “win” once in a while but nowhere near enough to the point that one could “make a living” out of it. There are horror stories about binary options and I count on writing about a lot of them hoping to save a few people from losing their hard earned money.

  3. Nate Reply

    Hi SJb,

    This is really interesting, I have prior experience in Forex, a few people have tried recommending binary trading to me but the idea has never really been that appealing.

    I know a couple of friends who are considering this, so I will recommend that they give your site a read before investing any money.

    • SJB Reply

      Yes please! I would NOT recommend binary options to anyone. If you read the comments, so many people have lost money with it…including me.

  4. Arif Reply

    Excellent site.
    I was very close to becoming a victim of these binary trading schemes.
    When you are searching for jobs that you can do from home to earn some income you come across many adverts. There is a new thing going on in Binary options. Although you can make money, it is tough and you need to be very very lucky. It is gambling and that is the downfall of many. They advertise it in a way where it is very enticing. The last one I looked upon indirectly lead me to WA. So glad it did.
    when you join you have to pay in most cases $200 dollars to start trading. And also in most cases you lose it! I am glad i stayed away.
    I hope your site reaches a lot of people because I have read so many people comments who have lost money.

    • SJB Reply

      Thank you Arif.

      My goal is to tell people the truth through my personal experience. I am happy that you didn’t get “sucked” in.

  5. Chris Reply

    The problem with binary options is that it is not based on day trading ethics – this means that you cannot recoup a bad trade in any way. When I day trade I play it safe and if I make a bad trade I simply wait a few days until the market returns to my start point. Binary Options is set over a small amount of time – it’s therefore a toss of a coin!

    • SJB Reply

      Hello Chris,

      Thanks for stopping by and giving me your input. It is a toss of a coin. Unfortunately, many people have lost a lot of money there.

  6. ChazzBrown Reply

    I think your comparison to binary options to coin flipping is dead on. Except you’re flipping for huge sums instead of pocket change.

    This is actually a much riskier pastime than say online poker for example.

    Even if you get lucky and “win” with binary options, it’s no more significant than flipping heads three or four times in a row.

    Keep it up and the odds will even out.and you will give every penny back!

    • SJB Reply

      Hello Chazz,

      I’m not sure about getting every penny back. I have heard so many horror stories about people who have lost so much money with Binary Options…myself included. It’s not a business. It’s a gambling game. One can’t make a reasonable living doing this and this is what they are selling. It’s dishonest in my opinion. Thanks for stopping by.

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