Looking to avoid binary options scams?
Learning to distinguish the real investment opportunities from the frauds takes some practice, but it’s by no means an impossible task. In fact, there are some very clear telltale signs of binary options scams that should be enough to keep you safe and away from poor investment choices.
Research Brokers Before You Invest Any Money
You’d be surprised how easy it is to set up a brokerage company and an investment website. Just because the wording sounds good and the site looks well-designed doesn’t mean the people behind it are legitimate.
Before you do anything else, try a quick Google search of the company’s name and see what comes up. If there are complaints against the company, read them. Complaints from people upset that they didn’t make money won’t hold much value, but complaints about difficulty cashing out, bonuses that never materialized or small print that affected the outcome of the investment, could indicate trouble ahead.
Next, check the company’s website for a street address and a phone number. If you can’t find one and the only address listed is a P.O.Box, be cautious. It’s easy to hide your identity this way and you might not have any recourses if the company turns out to be shady.
Be Wary of Bonuses
Bonuses have become a common offering in the binary options sector. That means almost every broker out there will offer some sort of bonus (free money) if you trade with them. The problem is that not all bonuses are the same and in some cases, accepting a bonus might end up costing you dearly.
Here’s an example: You deposit $1000 into your trading account and accept a bonus of $500. However, when reading the fine print in your contract, you realize that your $1500 is now tied to the account and you can’t withdraw any of it until you’ve completed a certain number of trades or reach a certain trade volume requirement. The requirement is often very high – up to 40 times the initial amount – which means you might never be able to withdraw your money because you might lose it all before you even reach that amount.
If your broker is offering a bonus, read the contract carefully before accepting it. See what it obligates you to and what you’re giving up in exchange for it.
Make Sure You Understand the Terms and Conditions
Just like in the case of bonuses, some terms and conditions in contracts can ruin any potential for long-term financial success if you’re not careful.
One important thing to look at? The minimum withdrawal. Ideally, you want something as small as $20, and not anything close to your original investment. Otherwise, your money might get stuck into the account for a long time.
Another important consideration is fees. Make sure you know what fees are associated with trading, withdrawing, and closing the account. Some brokers charge a wiring fee (as much as $45) every time you withdraw money, while others might impose penalties if you withdraw too soon or too much at once.