Binary options are praised in many online portals and certainly in the highest tones by the brokers themselves, while consumer advocates vehemently criticize the trade. In fact, there have been some problems with binary options providers in the past, as it is still a recent form of investment. Especially in the early days, the lack of regulation of the market has left many questionable brokers out there who have cheated their clients in various ways. But is there anything to discourage binary options trading in general? Or do they offer good opportunities for high profits? Under what conditions can safe trading in binary options be successful? In the following article we would like to address these and similar questions and get to the bottom of Consumer Alert warnings.
Is binary options a good way to start trading on the financial market?
Many of today’s successful traders have found their way to trading financial products through binary options. Here are some advantages for beginners:
- Placing a trade requires only a few steps
- Potential profit or loss is already determined, so no complicated calculations are necessary
- For many brokers, only a low minimum deposit is required, others do not even require a minimum deposit.
- With a free demo account trading can be experienced without obligation and without risk
- There is no extra money. Hence the maximum amount the trader can lose on the trading account
It sounds very positive at first, but as with all advantages, disadvantages are often hidden. Thus advertising for binary options usually presents them as very one sided.
Disadvantages of binary options:
- Binary options are highly speculative: price trends are difficult to predict despite good analysis techniques
- If the price was predicted incorrectly, the entire bet for this trade is usually lost.
- Brokers usually provide the courses themselves. In the case of questionable providers, fraud cannot be ruled out
- Binary options, like gambling, can be addictive
- The word is given for business. it is not possible to exit before or after
Are binary options a form of gambling?
Binary options are often compared to roulette or other games with a 50% win probability. Of course, brokers don’t like this and professional traders are generally interested in keeping their activities in the best light. It is said time and again that binary options can influence the outcome by allowing traders to learn price analysis and thus predict the price trend with a probability better than 50%. In fact, professional traders are able to increase their chances through good analysis. But this is not such a significant increase that now almost every trade is won. Even the pros get more than half of their trades, but this is enough to trade with positive expectation.
Criticizes in the presentation of options for consumer analysis that beginners get a false idea of what is possible through a comprehensive “education”. Even professionals don’t make profits consistently, but their results are subject to strong fluctuations. High-value phases are part of this despite optimal value analysis and can only be overcome through consistent risk management.
Can I Trust Binary Options Hype?
Binary options are becoming increasingly aggressive and are sometimes advertised in very questionable ways. Therefore, caution is advised when advertising binary options, and in case of doubt, additional information should always be obtained from independent sources.
As with other products, binary options advertising highlights advantages, while minimizing disadvantages or even silently disregarding them. It is possible to get up to 90% profit in a matter of seconds while trading. This statement refers to a single trade and at the same time as 100% loss is possible is not mentioned. Even the best professional will not win all their trades. Thus, there is not a single trader with an average profit per trade of 90%, which is why such a statement is misleading and leads to misunderstanding among the target group.
What does “over-the-counter” mean?
Binary options are not traded on stock exchanges, but directly between two trading partners. It’s not even the “real” product purchased, but only a condition fulfilled. Therefore, binary options can now be offered by some bookmakers as well. Due to its independence from the stock exchange, trading is not tied to opening hours, but can take place around the clock. The fees are also very less while doing share trading, as the stock exchange fees completely vanish. Thus, trading off the stock exchange offers several advantages, but the disadvantages should not be hidden: In OTC trading, prices are usually provided by the brokers themselves. As a result, value developments between individual providers differ significantly in some cases and course design cannot be reconstructed. Although reputable providers fix prices exclusively in terms of supply and demand, there is certainly a possibility of price manipulation that traders suffer from. Therefore, it is of utmost importance to trade with binary options only with trusted providers.
How can I tell if I am being cheated on binary options trading?
To minimize the chances of fraud from the outset, you should be very careful when choosing a broker. Check whether the provider you are considering is adequately regulated and search the internet for opinions from other traders. Also on our website you will find many reports on different providers, which can help you in finding a reliable and reputable broker.
However, if you suspect that you are being tricked into trading, do not hesitate to contact the Consumer Advice Center or other advice centers with your questions about this particular binary options broker. This may already be complaints from other users to this provider, so that taken together against fraud.
However, not every loss in trading is due to fraud. As this is a highly speculative form of trading, high losses, up to complete loss of invested capital, are not uncommon, even with reputable providers. If you have any questions, don’t be foolish enough to contact the support department of the broker. For reputable brokers, there should be a lot of interest in clearing your uncertainties and you will get a quick response.
What does “over-the-counter” mean?
Binary options are not traded on stock exchanges, but directly between two trading partners. It’s not even the “real” product purchased, but only a condition fulfilled. Therefore, binary options can now be offered by some bookmakers as well. Due to its independence from the stock exchange, trading is not tied to opening hours, but can take place around the clock. The fees are also very less while doing share trading, as the stock exchange fees completely vanish. Thus, trading off the stock exchange offers several advantages, but the disadvantages should not be hidden: In OTC trading, prices are usually provided by the brokers themselves. As a result, value developments between individual providers differ significantly in some cases and course design cannot be reconstructed. Although reputable providers fix prices exclusively in terms of supply and demand, there is certainly a possibility of price manipulation that traders suffer from. Therefore, it is of utmost importance to trade with binary options only with trusted providers.
How can I tell if I am being cheated on binary options trading?
To minimize the chances of fraud from the outset, you should be very careful when choosing a broker. Check whether the provider you are considering is adequately regulated and search the internet for opinions from other traders. Also on our website you will find many reports on different providers, which can help you in finding a reliable and reputable broker.
However, if you suspect that you are being tricked into trading, do not hesitate to contact the Consumer Advice Center or other advice centers with your questions about this particular binary options broker. This may already be complaints from other users to this provider, so that taken together against fraud.
However, not every loss in trading is due to fraud. As this is a highly speculative form of trading, high losses, up to complete loss of invested capital, are not uncommon, even with reputable providers. If you have any questions, don’t be foolish enough to contact the support department of the broker. For reputable brokers, there should be a lot of interest in clearing your uncertainties and you will get a quick response.
I lost everything with binary options. Whom can I contact?
In most cases, it makes sense to contact a consumer center or similar if you have problems with binary options brokers. While they may not be able to recover their own losses, they can determine whether there is potential fraud. It is important for traders to report unexpectedly high losses, even to the other broker’s clients, so that there are not only success stories of brokers on the internet who seem to have managed to make a profit. Finally, the threats must be shown.
For the trader himself, it may be useful to seek advice from consumer advocates. For example, it can be determined whether further losses due to similar investments are imminent. Consumer advocates can also provide advice on how to deal with the loss if it represents a serious financial burden.
It is best, of course, to invest only money in speculative investments, which can be distributed with emergency without any restrictions.
Does consumer protection consider binary options rightly important?
We analyzed binary options trading in detail and informed ourselves about a wide variety of brokers. We can understand the criticism of consumer advocates of binary options and consider them to be largely justified. In fact, trading binary options involves a lot of risk for traders, because even if they do everything right, high losses threaten. Even the entire investment can be lost in no time. Therefore, only money should be invested, which is not required for life or for subsequent purchases.
There is also a risk of fraud, which is why a broker for trading in binary options should be chosen very carefully. Pay attention to regulation by recognized authorities and also research other traders’ experiences with this provider. Before registering, the terms and conditions must be read carefully. Consumer protection is often criticized here, that certain clauses should not be allowed in India from unknown providers. If you encounter any ambiguity while reading the terms and conditions or if the conditions seem suspicious to you, it is probably best to contact the Consumer Protection Advisory Service before opening a trading account with this broker.