Over the years, investors and traders have fallen victim to numerous scams. Now that financial matters can be conducted with a computer and over the internet, it can often be difficult to know which trend you can trust. This is why some people may have their doubts regarding binary options trading. It is quite a new online investment tool and thus may not be widespread knowledge. If you are concerned about the legalities or if you want to find out if binary options trading is a scam, keep reading.
Is Binary Options Trading Fake
While binary options trading has been going on for several years, most people are only just beginning to hear about it. As it tends to be a more unorthodox way of investing ones money, most people naturally assume that it is either a rip-off or it is illegal. Well, the short answer is that binary options trading is not a scam. It is perfectly legal for you to make predictions about whether the value of an asset class will increase or decrease.
Can You Make Money with Binary Trading
One of the other reasons that binary trading can seem like a racket is because people do not understand how to make money from it. It is actually quite simple – you simply choose an asset, share, or commodity that you wish to ‘bet’ on. Then, you will decide whether that venture will rise or decrease in price, within a certain period of time. If your prediction is right, you get your money plus an additional amount. If you are wrong, you lose that amount. As long as you make informed predictions and play your cards right, you can continue to make money with the trades.
How to Find a Reliable Broker
While the trading process is legal, there are nevertheless some warning signs that you do have to watch out for. Just because binary trading is a legal way of investment, does not mean that certain individuals will not take advantage of the more innocent investor. Thus, while binary options trading itself is a real activity, not all brokers involved are as reliable as the trading process.
- One of the ways that you can avoid a binary trading scam is to employ the right broker. This means doing considerable research into the company that you want to hire. You will need to understand just how they operate and what they intend on doing with your money.
- Furthermore, you should also find out if the company in question has ever had suits or actions filed against them. This could indicate criminal or at least unethical practices.
- The best way, however, to ensure that you are choosing the right broker, is to know that they are liable to a higher authority. This means that the broker must have to answer to a government or financial agency that monitors all of their activity. This is why you should also check that the broker has some form of license to conduct the binary options trading.
What are the Rules for Binary Options Trading in Your Country
Another component of evading binary trading frauds, is to understand your countries position on it. In most countries around the world, binary options trading is completely legal. However, this does not mean that it is always regulated. Regulated refers to the fact that the government creates a set of rules that each and every broker must abide by when dealing in that particular country. Failure to do so will result in legal action or even criminal charges being levied.
In certain destinations, working with unregulated brokers is cause for legal concern. For instance, in the United States, you are expected to only work with regulated brokers. You are also required to use three particular platforms: NADEX, Cantor Exchange, and CME.
In Europe, CySEC is the governing body for binary options brokers. If you are in France, you can also opt for brokers who are AMF certified while in Italy, CONSOB is also an acceptable alternative. In the UK, brokers that are regulated by the FCA are also reliable partners you can work with.
What are the Benefits to Working with Regulated Brokers
While you certainly want to avoid a binary options scam, it can seem tedious to be so thorough about choosing a broker. Nonetheless, it is the only way to ensure that your money is safe and that you will be paid exactly what you are owed. Brokers that are regulated are obligated to follow a certain set of rules. If they fail to do so, it is easy for you to report them to the governing body in charge. The authorities will make the necessary investigations and then take legal action. Through this, you may actually be able to make back some of the money that you lost or at the very least be vindicated.
All of the information provided above should be enough to answer the question, is binary options trading a scam. While it is a legitimate form of trading, you should always take the necessary precautions to safeguard yourself. This includes finding the right broker as well as adhering to the law of the land.
All of these methods will go a long way to ensuring that you will be able to make a considerable amount of money, in a legal manner.