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How to Avoid a Binary Options Scam

Updated on April 8, 2011

One cause of concern for many amateur traders today is a binary options scam. Because of the popularity of this type of options trading, many shady brokerage firms resort to manipulating people who are still getting used to the ways of binary options trading. If you are a new trader, here are a few tips that you should always remember in order to avoid a binary options scam.

The first and foremost rule in avoiding a binary options scam is doing your homework and making a solid research on the brokerage firm that you intend to trade in. Of course, it is effortless to do so with the help of the internet but remember that it is not the most reliable resource when it comes to doing background checks on dubious brokerage firms. You have to ask about the regulatory body where the firm is purportedly registered. And then you have to double check on the regulatory body to see if their story has validity. A registered brokerage firm is highly unlikely to deceive their members through a binary options scam.                        

Another thing that you should bear in mind in order to not become a victim of a binary options scam is that you should be always critical of gimmicks that dubious brokerage firms employ in order to make people register to them. Many of these companies will tell you that they will give a “signing bonus” that will become available once you’ve deposited the money in your trading account. However, once you have deposited the money, the firm’s website will suddenly become inaccessible and you will have no means to contact them so that you can get your money back.

Last but not the least, you need to find an actual member of the firm that can confirm that it is not a binary options scam. Search for people who were trading in the broker’s website for a long time already and not just people who have been a member for only a few weeks. For all you know, that person could also be a potential victim just like you are. Therefore you need to find a real person who has been trading in that platform for at least a year, someone who is actually earning from it for a long time already, and does not find the system to be suspicious at all. If you managed to find that person, then there is a good chance that that firm is not a binary options scam.


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    • chamilj profile image

      chamilj 6 years ago from Sri Lanka

      I do trade FOREX & Stocks but never tried Binary Options trading. Thanks for the information.