There are a lot of debates going around in the internet discussing whether binary options are a scam or not. More precisely, people want to know whether you can use binary options to earn money or if it is some kind of derivative from online casinos and other scams where people have almost 0 chances winning, but the broker or the organizer always wins. Binary Options – scam or not? Let’s try to figure that out!
Firstly, we will analyse how online casinos work. Please, don’t mix it with the actual roulette or blackjack games which some of you practice in offline casinos like Gala, Grosvenor or Hippodrome, where you play against the dealer and luck. In online casinos some say that there is a MD5 number generator which is programmed and can’t be influenced by any online casino. Unfortunately, there is no proof that online gambling sites don’t change the winning percentage of their customers. Those number generator scripts are complete rubbish and whoever plays casino knows that they have small chances of winning. Scientists have proven that there is more chance of you getting crushed by a vending machine (yeah, people in USA get stuck under them several times a year), becoming president or dying in a plane crash than winning the lottery.
Binary Options is a Scam!
No, it isn’t. Binary Options brokers get their market quotes from reputable sources like Thomson Reuters, and they can’t have a crafty algorithm to change those live quotes. Even if they would do that, you could easily check the quotes by comparing them to the data from MetaTrader4 for example.
You can’t influence the market so easily, you will need about $10,000 to influence a market even the slightest bit and you still wouldn’t be able to have enough effect on it to get some profit out of it. Also, most of the traders at binary options keep records of the transactions they make in order to control their actions – that is rarely done at online casinos.
Another point which I would like to make: there are more than ten binary options brokers which work with thousands of traders longer than a year, and they regularly pay and continue to work with even very profitable traders! Online casinos and bookmakers don’t like profitable clients and they even decrease the payout percentage or find ways to block you from the site.
Competitiveness between binary options brokers makes the trading conditions even better – brokers try to give better % payout as well as give more bonuses to their active traders. Brokers also have a large annual turnover and as a result profit, so they don’t need to worry about all the payouts. BUT! There are binary options brokers which a scams, because they give 90-99% profit to their traders, meaning they earn around 10% from each transaction? That’s not a lot, considering that every broker has to pay wages for their workers + office rent + trading platform fees + advertisement – 10% of all the profit is not enough. Such brokers can’t live more than a year and they are usually marked as pyramids or HYIPs (High Yield Investment Programs) – avoid them, and use the trusted brokers which we have been listed on our website. Normal profitability should be in the range of 70% to 85%.
Binary Options Broker – friend or a foe?
Despite the facts which I have outlined above, you shouldn’t get too friendly with binary options brokers. They are interested in earning money and nothing else, that’s why they have their own “strategies” and “signals”, which usually don’t work well for YOU. Always read “Terms and Conditions” of each broker, like you would do when you sign an important document (getting a mortgage or buying a house). I do hope you take some documents in your life seriously and actually read every point stated in it, otherwise you could end up without your pants :D. There are some good promotions though, like “make a 5000$ deposit and get a new iPhone 6”, so you get 20% back as a gift and your deposit stays safe. You just need to make 3-10 transactions with this broker and then you can withdraw your money. Never give your password to any managers of your chosen broker. There’ve been cases where a manager asked for the password and stated that there are good bets that he could make to earn some money for clients. In the end client ended up without any money, but according to the terms and conditions the broker was legally completely in the clear.
We will try to write a separate in-depth article where we give tips and examples on how to recognise binary options scam brokers.
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