Understanding Binary Options Scams before investing in it Binary Options Scams are carried out on internet-based platforms which do not comply with U.S. regulations. Since there is a lack of awareness, many fall for these scams. So what exactly is Binary Options? Binary options are financial instruments that payout in one of two ways if the contract is kept until it expires: a predetermined sum or nothing at all. As binary options exercise automatically after the option is acquired, the holder has no additional decision to make about the exercise of the binary option. That's the reason they are called Binary Options, as there is no other possible settlement. How are Binary Options Scams carried out? The world is now connected through the internet. As technology evolves, more scams are being committed online. It is easier to commit a Binary Options Scam as the scammer might own an American or European countries sim card while making calls from third world countries. To captivate the victim, the websites of potential Binary Options Scams are flawless—they even fake addresses of famous places in New York or London. The United States Security and Exchange Commission has identified three common ways scammers lure a potential investor through internet-based trading platforms. Refusing payment and reimbursement to the investors: The victims are mostly attracted by the scammers through a call. They make these victims deposit large sums of money. When the victims try to withdraw the money they cannot. When the victims call the scammer, they usually hang up the phone, refusing to call back. Identity theft carried out by scammers: This kind of scam is usually carried out on the internet. The Victims are usually contacted through email with an assurance of quick money through Binary Options on the trading platforms. For unspecified reasons, personal data is collected, including passports, credit cards, and driver's licenses. Later the data collected from the victim is used to steal their money. Selling rigged software to the victims: The victims are attracted through emails or online adverts. Once the link is accessed, a professional-looking site pops up with all the instructions for downloading the Binary Options internet platform. As the victims start to trade in, eventually, a time comes when the software distorts binary options prices and payouts. Thus initially, the victims make a profit, and when the stakes are high enough, the scammers manipulate the software to their advantage. The other most prominent scam is convincing the victim to pay $50 on the stock in Binary Options and promise to pay more than $5 per share once the option expires. The victims fall for it because there is a 50-50 chance of winning and losing. In fact, the payout structure is designed so that the expected returns on investment are always negative. Steps to identify Binary Options Scams.
Before investing in it, it is always wise to check out the background, like registration or license status. It may also help if further details of any firm or financial professional you might have considered deals with through SEC's Investment Adviser Public Disclosure (IAPD) database, on Investor.gov, and the National Futures Association Background Affiliation Status Information Center's BASIC (NFABASIC) Search. If the firm or the financial institute is not listed, it's not worth pursuing them as they are potential scams. Restrain sharing your information to any calls with regards to Binary Options.