Avoid Binary Options Broker Scams
In the past five years or so, binary options have gone from relative obscurity to being the favored form of trading for countless people all over the planet. There are many reasons for this, but one of the main ones may very well be that it promises big profits and a lot of excitement. The bad news is that these features attract so many people, scam artists are never far behind. Before you spend money on a binary options broker, understand that some may not be all they claim. Here’s how to avoid this eventuality.
Do Your Research
One of the easiest things you can do is simply enter the name of any binary options broker or service into Google and see what comes up. Enter the word “scam” after the name too, in case nothing shows up the first time.
The World Wide Web has made life a lot harder on scam artists so long as would-be victims take a couple minutes to do a little research.
Claims That Are Too Good to Be True
You know the old saying about something being too good to be true. You’d do well to remember it when shopping for a binary options broker. Otherwise, you’ll find it very easy to get caught up in their claims.
A lot of brokers will claim they charge little-to-nothing for each trade. This sounds awesome, especially when you consider that you could easily spend 20% of your earnings per transaction.
Unfortunately, what many have found is that a binary options broker who claims this kind of setup is able to do it because they plan on charging a ton of exorbitant—and hidden—fees.
It’s Too Easy to Deposit Money
In order to get started with a broker, you should have to jump through a number of hoops first, albeit justifiable ones. If a website you’re on makes it all too easy to send them money, you should be concerned.
A legitimate and reliable company will make sure that you are who you say you are. They should then be providing a secure channel for your funds to keep hackers out.
A broker that doesn’t do this just wants your money and clearly has no long term interest in doing actual business with you.
Customer Service Is Lacking
Customer service is vital when it comes to trading options. You wouldn’t want to find yourself with problems using a platform and unable to get a hold of anyone.
One way to look into this is by calling the customer service line during trading hours. Try their email too. If you don’t get an answer on their help line or a timely response to your email, they may not be scam artists, but they’re still not worth your time.
Finding the right binary options broker is essential if you’re going to be successful at trading. However, with so many scam artists out there, looking out for the above warning signs could save you a lot of money.
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Other than selling covered calls, I would stay away from options. A solid ETF stock, like IVV or IVW, will make more money in the long run.