Binary Options Trading: Why this is the most dangerous time

Binary Options Trading: Why This Is The Most Dangerous Time

Rise of Binary Options

Since late 2015, the term "Binary Options Trading" seemingly came out of nowhere and then suddenly, with a furiousity that was not seen in previously hyped "investment tools" such as Bitcoins and "Spread Betting", Binary Options Tradings trading suddenly swept across the internet. Everywhere you searched about options trading or investments, whether on Google, Yahoo, Facebook or even Youtube, you are most likely going to be greeted with articles or videos of how people can make millions quickly with this "new investment tool", make 75% or 95% of your money within as little as 30 seconds as well as stories (yes, just stories... most of which cannot be correctly verified) and testimonials of how ordinary folks are making millions within months or weeks from the comfort of their homes all over the world.

Those so-called "Binary Options Brokers" launched an impressive internet marketing campaign utilizing the very best of internet marketing practises and working with the very best of internet affiliate marketers all over the world in a combined effort to make binary options trading irresistable to the common folk looking to invest for an additional income through this global economic downturn. Videos, articles, ads, testimonials, you name it, everything was employed to make binary options trading look like a legitimate and real derivatives investment tool, thereby creating a false sense of trust and credibility. To the uninformed new investor or beginner options trader looking for information on the internet about investing or options trading, binary options look too delicious to ignore and so many have jumped in only to be burned and disappointed. The worse thing is, they think binary options trading is REAL options trading and henceforth think options trading is a scam as a whole.

This is the danger these so-called "Binary Options" pose to investors and also the reputation of the options trading industry.

Binary Options Trading: Why This Is The Most Dangerous Time

The Realities of Binary Options Trading

Over the past few months, there seems to be a global awakening to the realities of "Binary Options Trading". Reputable websites, investors, regulators and even myself stepped up to write about and to educate the masses on the realities of trading binary options. I wrote two very important articles along with 2 very informative infographic; one article exploring whether or not it is actually possible or probable for someone to get rich or make consistent money through binary options trading, taking into consideration the timeframe, the nature of binary options itself as well as some "tricks" employed by binary options brokers. If you have not, please read Can You Get Rich Trading Binary Options?. My other article attempts to correct the misunderstanding out there that binary options trading is the same / is REAL options trading. I outlined 10 main differences between binary options trading and REAL options trading in this very dangerous time. If you have not, please read Difference Between Binary Options Trading and Real Options Trading. There are real and legit binary options trading in the forex market but they are not the kind that are being advertised all over the world now and definitely not the kind you have heard of creating millionaires so far. 95% or even 99% of these binary options brokers are nothing more than unregulated online casinos that operate exactly the same way online casinos and online gaming sites do. How did they look legit like real investment institutions?

How Binary Options Brokers Look Legit

So, how did Binary Options Brokers manage to make themselves look legit? Firstly, they dressed their websites to look exactly like real options brokers do, using plenty of financial terms and jargon to make them look like real investment institutions. However, indeed to the everyday guy, it looks completely real, real forex prices (most binary options brokers dress up their binary options using forex because its a 24 hours market so they can get those price data flowing in 24 hours a day to keep profiting from you, the binary options trader 24 hours a day) and even a trading interface real enough to fool experienced online stock traders. However, at the start of 2016, there begun to be more widespread awareness of how binary options brokers are actually unregulated entities and therefore not legitimate equities investment. This ripped a big hole in the pockets of these clever binary options brokers and they came up with their most powerful convincer ever... some of the richest binary options brokers managed to get themselves "regulated" by CySec, which is the Cyprus Securities and Exchange Commission in Europe. This no doubt completely erased the final bit of doubt surrounding the legitimacy of binary options and those rich binary options brokers bearing the title "Regulated by CySec" roped in massive signups.

Binary Options Trading: Why This Is The Most Dangerous Time

The Bubble Begins To Burst

The success of being titled "Regulated by CySec" didn't stop many of these binary options brokers from continuing many of their illegit practises that I outlined in "Can You Get Rich Trading Binary Options?". This started to get the attention of arguably the most important derivatives regulator in the world... the The Commodity Futures Trading Commission's (CFTC) of the United States. The CTFC issued a series of investment fraud warnings against "fraudulent schemes involving binary options and their trading platforms" (read the full CTFC statement here)

CTFC statemment on Binary Options Fraud

CySec also begun to look harder into this whole issue of allowing the registration of "Binary Options Brokers" with them and start to indeed find problems with how "Binary Options" are designed in a way as to make it disadvantageous to binary options traders. Amongst those reasons is the 30 seconds expiration which I explained in "Can You Get Rich Trading Binary Options?" as one of the main reasons why binary options traders failed to make money in binary options. CySec tightened the rules on "binary options" including not allowing 30 seconds expiration. In January of 2017, Isreal's regulators issued a warning on one of the biggest binary options broker, Fairtrade Binary as operating illegally. After several rounds of court cases, Fairtrade Binary was officially shut down in March 2017. Yes, one by one they are getting shut down. In fact, at this point in time 22 of the best knowned binary options brokers are already officially closed down either by choice or regulation.

Binary Options Trading: Why This Is The Most Dangerous Time

Enters the Real Danger: Broker Shutdown

So, why is this the most dangerous time to engage in binary options trading? What has the shut down of binary options brokers got to do with you who wishes to trade binary options? Well, the problem is this, and one which I outlined in "Difference Between Binary Options Trading and Real Options Trading" when an unregulated "binary options broker" shuts down, you don't get your money back even if there are still "cash balance" in your account! Real regulated options and securities brokers that are covered by investor protection insurance such as "FINRA" means that if the broker shuts down, you still get your money back under the insurance!

You Don't Have Real Money With The Binary Broker!

You don't get your "money" back when a binary options broker shuts down because in reality, you have no real money with them! This is also why you could actually invest in binary options using your credit card and not when you are investing in real securities such as real options trading or stock trading. Real regulated securities brokers act as agents and hold your money on trust and execute trades using those money for you on your order. At that time, your money remains your asset with real cash held in a real account in your name with the broker. When you "invest" money in most (if not all) binary options brokers, you are in effect buying "game credits" with the binary options broker (acting exactly like online gaming sites). So you have no real "Asset" with the binary options brokers. In accounting terms, you are in effect adding an "Expense" to your P/L statement rather than an "Asset" under your balance sheet! Yes, its exactly the same as buying game credits which gets accounted for as the receiving company's income rather than your asset that the investment institution is holding in trust like in real securities and derivatives brokers.

Since you don't have any real money or asset with the binary options broker and since they are not regulated nor insured, how are you going to get your money back? This is even worse for those one of a thousand of you who managed to make money and you won't be able to get back any of those extremely hard earned "earnings" (which really only exist as a game score in the binary options broker's system).

Binary Options Trading: Why This Is The Most Dangerous Time

Yes, this is the most dangerous time to invest in (or play with) binary options because binary options brokers are being shut down everywhere! You don't want to be one of those binary options traders to see your hard earned go down the drain as the binary options broker you are with shuts down, do you?
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