How Does a Binary Scam Work? {Save Yourself From Fraudsters}

How Does a Binary Scam Work

A binary option is a trading category that lets you deal in options contracts. Its payout depends on the outcome of a yes or no proposal at the time of contract expiry. Binary options traders get the payout if their guess on the price of a specific asset increases the strike price. Conversely, if their guess on the price of a particular asset decreases below the strike price, they make a loss.

What are Binary scams?

Frauds occurring in the case of binary options are binary scams. These scams are taking place in large numbers, just like any other scams. To defraud binary options investors, fraudsters use tactics such as refusing to reimburse customers, pressuring them to invest, etc. 

How does a binary scam work?

A binary options scam functions in the following manner:

  • Initially, the binary scammers post online ads about their binary options investment offers. Those advertisements take you to a website that looks like an established legitimate binary trading platform. 
  • Binary scammers may also utilize robocalls that request you to be online and speak to a so-called trader. 
  • After that, an experienced so-called trader may lure you with bonus money to open a binary options trading account.
  • They request you to invest your own money with the guarantee of vast and easy returns. But in reality, it is just a strategy to convince you to invest money in their so-called binary options trading offer. 
  • You will only be unsuccessful when you try to withdraw money or close your account. When you try to contact the so-called traders regarding this issue, they ignore you and eventually disappear with your money. 

Strategies used by binary scammers:

Here are some important strategies used by binary fraudsters to manipulate investors into binary options trading.

  1. Investors put their money into binary options trading accounts. Then the so-called binary options brokers encourage them to deposit more funds into their trading accounts. When investors try to withdraw money from their accounts or claim the returns promised by fake brokers, they aren’t successful. In turn, the fake brokers cancel the investors’ requests for money withdrawal or ignore their calls and emails regarding the same. 
  2. The scammers create fake binary options trading platforms that collect the personal or confidential information of the investors. It’s the most common strategy scammers use to hack investors’ personal data for unspecific uses. 
  3. By pretending to be someone the victim knows, scammers try to convince them that binary options trading allows them to earn money more easily. 
  4. These scammers cold call the binary options investors and describe non-existent binary options investment opportunities. They may even give false information regarding the investment opportunities to easily get you to invest your money. 

Red flags:

Binary options are already a part of finance. But a lot of scams take place even in this sector. As the binary scammers use many tactics to defraud the binary options traders, the traders lose their money and suffer severe losses. So, the red flags denoting binary scams are mentioned below, which can help stop people from becoming victims of binary scams. 

  1. You may come across some software for binary options trading that makes only profits but not losses. Stay calm because no such software for binary options trading can rule out the losses. 
  2. The fake binary options brokers may assure you high bonuses. But they ask you to invest more than your almost impossible capacity in binary options trading. If you get any binary options trading opportunities that provide significant returns on investment, then don’t accept them. 
  3. A website or profile relevant to binary options trading that lacks information about the company’s legal status or other required information is unlikely to be legitimate. It is because the company’s legal status, contact numbers, and additional information are always disclosed by real binary options trading websites or profiles. 
  4. If a binary options broker prefers to speak in person rather than online, then disagree. There is a high chance that the binary options broker might be fake and is trying to scam you.  
  5. Only trust binary options brokers who have licenses, registration, and qualification. Otherwise, you can land in trouble because of their shortcomings.
  6. If you have any doubts about the license and the registration status of the binary options broker, then don’t go ahead with the deal.
  7. You may see that the company which does not have its presence on Google has plenty of reviews on several websites. It indicates that it’s a scam. 
  8. Binary options websites may claim that the government requires copies of your credit cards, passports, etc. Remember never to give your personal information as you may land in deep trouble.
  9. Do not fall into the trap of high-pressure tactics used by binary scammers to convince you to trade in binary options. 

Protecting yourself from binary options frauds:

Thinking about how to protect yourself from binary options frauds? People trading in binary options must take the necessary steps mentioned below to stay safe from binary scams.

  1. If you are interested in investing in binary options, make sure you connect with a qualified and experienced binary broker. If you have a binary options expert by your side, you can efficiently perform trading activities. 
  2. Refrain from acknowledging cold calls regarding binary options trading from a random person. If you do, you will suffer tremendous losses, which is very dangerous. 
  3. Do not consider the messages or calls from someone you know, if it’s regarding trading in binary options. 
  4. If you doubt a binary options broker’s license or registration, don’t proceed with the deal. 
  5. If you get a message regarding an investment chance on binary options trade, then please consider that carefully. Don’t acknowledge it if it offers more investment returns with less or no risk. Remember that any investment opportunity does not provide gigantic returns without risks. 
  6. Never provide your personal information to anyone.
  7. Educate yourself about binary options scams and their warning signs.
  8. Please learn about the risks associated with binary options before investing your money. 

Conclusion:

People should always take preventive measures against binary options scams by getting educated about their warning signs. People should also learn about the strategies used by victimizers to dupe the traders. 

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