Is Binary Options a Scam?


is binary options a scam

In most cases, an online offer to trade binary options is a scam. But, there is at least one exception, which I’ll discuss in a moment. For now, let me tell you how to recognize the scams.

How to recognize a binary options scam:

  • If an online binary options scheme does not name the broker or makes huge promises about fast, easy money, it’s a scam.
  • If watching the sales video of a binary options trading offer makes you feel greedy, it’s a scam.
  • If there are testimonies from people who claim to have made lots of fast, easy money, it’s a scam.
  • If the binary options offer is not registered with the Securities Exchange of the country where you live, you are not protected by the law and should consider it a scam.

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The Binary Options Scam.

Scam brokers hide behind websites that make outrageous promises of easy wealth with special software. Please understand, no special software will make you rich.

A legitimate binary options broker won’t promise you anything. I do not recommend trading binary options, but if you want to trade them, go with NADEX. NADEX is a registered exchange in the United States and has an abundance of training material.

Please understand that trading binary options, even with NADEX, is risky.

What are binary options?

A binary option is essentially a bet. It is a wager that an asset will perform in a specific manner within a particular time frame. When you trade a binary option, you wager that the value of an asset will increase or decrease when expected. You DO NOT own the asset.

NADEX explains it on their website like this:

is binary options a scam

“Limited-risk” does not mean there is no risk. It means you cannot lose more than the money you have in the trade. Remember, losing ALL of the money you have in the trade is a real possibility.

Trading binary options is a dangerous game. The US Commodity Futures Trading Commission has this to say about binary options:

is binary options a scam - SEC warning

Is Binary Options a Good Way to Make Money?

Typically, binary options websites will suggest trading binary options is investing. It’s not. Trading binary options, at best, is nothing more than a game of chance. That’s as good as it gets. And, that’s IF you trade with a licensed exchange like NADEX!

If you get involved with an unregistered broker, you are giving your money to a criminal in another country and expecting it to end well. It won’t. Any money you give an unregistered broker is gone forever.

The Binary Options Subculture.

It’s not surprising that gamblers are attracted to binary options trading. It might be that a gambling addict gets the same high by trading binary options with the added benefit of deluding herself that she’s investing.

Binary Options Scams.

In spite of all the software, theories, systems and pseudo-science surrounding binary options, I estimate you will lose money 75% of your trades with a legitimate binary options broker.

Based on my two years of investigating online scams, I’m convinced you will 100% of your trades with an unregistered broker. You cannot win. An unregistered broker is just somebody in another country taking your money.

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The Scammer’s Song and Dance.

Many binary options scam websites are similar. Most people find these sites when they are searching for ways to make money online. A typical story is that some special person has developed a magic software that can make anyone rich on auto-pilot.

Just push a button, and the money will pour into your account. They guarantee it! At least, that’s the sales pitch.

If you get involved with a binary options scam, you will be directed to a second page where you are told to open a free trading account and deposit at least $250. They might even tell you your money is safe and can be withdrawn anytime. That’s a lie.

Once a scam binary website has your money, they are not giving it back.

Assuming you did open a trading account with a scam broker and deposited $250, within a day, it will appear that you’ve made a lot of money.

Maybe it looks like you’ve made a $1000 or $10,000. You haven’t. The scammer has just typed some numbers into the software. You will never be able to take this “money” out of your account.

The game the scammer is playing is to convince you that the special software can make you rich. They will tell you that if the software can turn $250 into $10,000 imagine what it can do if you put all of your money into the account. The scam is for you to scrape together all the money you can beg, steal or borrow and put it into your trading account.

The moment you deposit all of your money into the fraudulent broker’s account, you will be locked out, and your money will be gone forever. You’ll be left broke and humiliated. If you borrowed the money you gave the scam broker, it might take years to pay it back.

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A Better Option.

Making money online is a lot like making money anywhere else. It takes skill and effort. Fortunately, the internet permits you to leverage your work, so you can make more money faster online. But, this doesn’t mean you can get rich quick. It means with the right training and support, and if you take action, you can be financially independent in years instead of decades.

And it’s not hard. I’m confident anyone who can send an email and surf the web has the capacity for building a profitable online business, IF they are correctly trained and supported. That’s why we suggest the FREE Starter Level of the Online Entrepreneur Certification.

The FREE Starter Course will show you the fundamentals of affiliate marketing and introduces you to an amazing community of affiliate marketers who are ready to help you succeed. When you sign up for the Starter Course through this website, I’ll mentor you one-on-one at no cost.

To Learn More, Click Here.

If you found this article helpful or have experience with binary options, please leave a comment below.

20 thoughts on “Is Binary Options a Scam?

  1. Thanks for the post Gary!

    Prior to reading this, I wasn’t even aware of what binary options were! At first glance, it seems like a bit of a coin toss to me.

    I’m with you in that there are far better ways of making money online, in ways that avoid scams too!

    Thanks again for the share.

  2. I thoroughly enjoyed how you weaved back and forth from talking about binary options and Wealthy Affiliate. You are quite right that for the most part binary options are just a game of chance. But the again that goes for the stock market. True the stock market moves a little slower than the options market. It was a very enjoyable post.

    1. Hi, Chappy!

      I agree, the trading stocks the way most people do it is not much better than gambling either. However, a strategy of value investing is a solid strategy but it takes time. As you might know, Warren Buffet made his fortune through value investing.

      Thanks for stopping by,

      Gary

  3. What A great review towards binary option. Recently I have a friend that asking me that whether the binary options is a scam? I have no concrete answer for her. After reading this I have the better understanding and going to forwards your article to her.

    By the way, this is my first time I hear about Nadex. I will keep in mind on the Nadex as regulated by FTC.

    Thanks man for the informative article. I Learnt something today.

  4. I also ran into websites about binary options when I first started to look into making money online. It did sound tempting, but luckily I read some more about it before depositing real money into an account.

    In Denmark where I am from, an official consumer organization has even made a warning againts binary options as there have be many cases of people been tricked into investing huge amounts of money.

    it is probably possible to make some money on these options, but it seems like most companies that offer it are just trying to explode peoples’ dreams about making some extra cash-

    Mikael

    1. Hi, Mikael!

      I’m so glad you did not fall for the binary options scam. Most auto-trading offers are nothing more than a scam with the pretense of trading in binary options or FOREX. No trading happens. It’s just a trick.

      It’s revealing that Denmark has issued a warning about binary options trading schemes too.

      Thanks for stopping by,

      Gary

  5. Gary, thanks for the information on binary options. I have been in the financial services industry for 30 years and have seen it all.

    Like any other enterprise, one has to be well familiar with the territory and it looks like your website has done it. Simple, direct and to the point.

    What I especially liked is the interactive and personal approach to the information. As you kept the public informed you also displayed your “about me” on each page which kept the personal touch so that consumers can see the value of what you are offering. Well done.

  6. Hi Gary,

    Thank you for providing this valuable information. I came really close to falling for the scam.

    I am now believe in doing thorough research before trying to invest our money.

    Thanks for helping me make a more educated decision.

    What i did before reading more into it though, was setup an account with betterment, have you had any experience with that company?

    thank you,

    Luis

  7. Good Morning Gary

    You are becoming my source for scams. We all appreciate all the good work you guys are doing.

    Till today I had never heard of Binary Options and I guess that’s a good thing. You mentioned NADEX which is another one I have not heard of before.

    So this bet you speak of… are you talking about the stock exchange or something else? You also mentioned the term “securities exchange” is that the stock exchange? I will do some more research but I did want to engage with you here.

    One question a little off topic.. I have thought a lot about adding video’s to my site. What equipment/software are you using?

    Respectfully,

    Russ

    1. Hi, Russ!

      Thank you for your kind words regarding ScamAvenger.com. It’s a labor of love and the reason I get out of bed in the morning.

      NADEX is licensed in the United States to facilitate the exchange of binary options. It is the only licensed exchange I know of. An exchange is merely a place where traders can buy and sell assets. To clarify stock exchange vs securities exchange, the stock exchange is all about company stock, that is owning share of a company. The securities exchange is broader and includes all financial instruments like bonds and treasury bills.

      I do not recommend binary options to anyone, but if they are determined to trade binary options they should do it with NADEX because NADEX is regulated by the FTC. All other so-called brokers are scams.

      In legitimate binary options trades, two “traders” bet on the behavior of an asset and when the asset will behave as anticipated. The asset can be just about anything, but stocks are typically used.

      For example, I can enter a trade by buying a binary option that on May 1, 2017 between 2pm and 4pm IBM stock will increase in value. You can take the opposite side of this trade by buying a binary option that says the value of IBM stock will go down at this time. Only one of us can be right. Neither of us own IBM stock, we are just betting it will do what we expect it will do at that specific time. If you lose, you only lose the money you have in the trade which is usually $100.

      You may have heard of the enormous risk derivatives pose for the global economy. Binary options are derivatives. They have no value in themselves. They are just bets. The small trader is at a huge disadvantage with binary options as large traders, like hedge funds, can influence the market in their favor. The small investor is just there to keep the market liquid so the big guys can churn profits.

      I highly recommend that you DO add videos to your site. The tool I use to create the animated videos on ScamAvenger is called PowToons. It’s fun and saves me a lot time.

      Thanks for stopping by,

      Gary

  8. Great Information! I have seen a few pitches on binary options guaranteeing a return on investment. As the old saying goes, if it sounds too good to be true, it probably is.

    Thanks for spelling it out because I had no idea how this stuff works.

    Keep up the good work!

    1. Hi, Stacy!

      I started investing in the mid-70s when investing meant something entirely different than it does now. The internet has confused people into thinking that speculation and gambling are investing. It’s not at all.

      If a so-called investment is largely dependent on luck, it’s not an investment, it’s gambling. If a person does not understand the fundamentals of an investment, they darn sure should not be putting money into it.

      Thanks for stopping by,

      Gary

  9. Hello Gary,

    Thank you for coming out with this topic. I was a victim of those people. You said it all, it is nothing but a lie. They told me to pay a certain amount and immediately I will start trading after a certain code which they will give me after the transaction is complete. I did so.

    Immediately after they received my money they stopped communicating with me. I waited for two days thinking that maybe they will contact me back. Oh my God!

    I had to contact my bank and tell them that I have been scammed. Luckily I have a very good bank and they managed to take back my money. And they told me that they have been soo many reports about this people.

    Thank you again for sharing this with the world.You are helping a lot of people.

    1. Hi, Sunewako!

      Thanks for sharing your experience with Binary Options trading. I’m so glad the bank was able to help you get your money back. Most people are not so lucky.

      Thanks for stopping by,

      Gary

  10. I subscribe to some “make money online” Facebook groups and always see posts for binary options trading. They certainly sounded like scams and your article confirmed my suspicions. I will be sure to stay away from these as there are certainly better ways to earn income online, specifically with affiliate marketing. Hopefully more people read this article before being scammed.

    1. Hi, Tony!

      Binary options is NOT the way to make money online.

      Perhaps because the internet allows us to communicate instantly, many people think it should also make us rich instantly. That just isn’t true, although with the right training and consistent effort it is possible to earn a respectable income in a short period of time. I don’t mean overnight, I mean earning a full-time income in 12 to 36 months.

      Here’s where to learn.

      Thanks for stopping by,

      Gary

  11. This was very interesting.I have not run into binary options yet, but I am sure I will at some point. It sounds a lot like futures trading, but without the upside and a lot more risk.

    if I did want to play around with it, with a small amount of money, are there any companies you would recommend?

    1. Hi, Eddie!

      The only binary options broker/exchange that I know to be registered with the US SEC is NADEX. Trading binary options is at best very risky. Please do not invest money you cannot afford to lose.

      All the best,

      Gary

  12. Hi Gary,
    I kind of stumbled onto your page, and I’m glad I did… I heard about binary options some time ago, and I’ve been curious since. Wow… Some crazy stuff going on with the binary market…
    I have some experience with Forex, and based on what I’ve read, those are two very different animals. Forex is run largely by banks, and while there are moral hazards within the industry, you’re not so likely to be stolen from. And… You can make real money with Forex if you develop a disciplined, statistics based strategy.
    The one advantage that Binary has is that you can’t lose more than you deposit. With leveraged Forex trading, that can happen.
    Hope this wasn’t too much of a ramble; it’s interesting to see the difference between trading options.
    Thanks for the in-depth look at binary.

    1. Hi, Paul!

      I’m not as knowledgeable of FOREX as I am of binary options, but will be looking into FOREX in the future. It’s my understanding that FOREX is essentially arbitrage between the values of different currencies.

      Binary options is a bet that a specific asset will increase or decrease in value at a specific point in time. Both are risky. And both, are essentially markets that were created for the benefit of very large traders.

      No matter how experienced, knowledgeable and lucky a trader is, he will never be able to compete with the big traders and their huge, hyper-trading computers and teams of analysts. The role of the small trader in these markets is to keep the market liquid and funded, so the big guys can consistently make winning trades.

      Thanks for stopping by,

      Gary

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