Are binary options a scam?
I often get asked if cyber futures and binary options are scams. Many tell me that they have heard that they are scams or tell me that they have a friend that got scammed when he started trading with binary options. My first thought is always to say no and explain why binary options are not a scam. Binary options is a financial instrument that allows you to make a lot of money. The terms and conditions that applies while trading is clearly stated on all broker websites.
This is true but a more nuanced honest answer is this:
Binary options are not a scam but some brokers and other services are.
The binary options industry is a young industry and the regulation is always evolving to offer the traders better protection. It is a industry that attracts a lot of money and that lacks old well establish brokers. The binary options industry have only been around for a few years. Therefore there are no brokers that are more then a few years old. This combination of large amounts of money and the lack of well established, well known brokers have attracted a number of scammers to the industry. Scammers that just want to make some quick money, that do not want to build a successful broker. These scammers have in the past opened a number of brokers that acted very irresponsible and that made sure that the traders always lost their money.
Most of these scam brokers have now been forced out of the market. There is however nothing that guarantees that there wont be any new scam brokers that enters the market in the future. It is therefore very important that you make sure to chose a regulated broker that is regulated under a well developed legal system. One example of a jurisdiction that have a well developed binary options regulation is Cyprus. Malta is another example of a jurisdiction with a well developed regulation. I also recommend that you use a trustworthy review website to make sure that a broker is reputable before you register with it.
Newer register with an unregulated binary options broker. I also recommend that your refrain from registering with new brokers. Wait until they have proven themselves over a period of time before you register with them.
Other scam services.
There are a number of different third party services available for binary options. Most of these products are scams and I do not recommend that you pay for any of them. Be vary of any service that promise to make you rich or to promise to make you free money. Good example of products of this type includes binary options signals, binary option systems and trading robots. Almost all (all) products in these categories are scams.