Warning about Binary Options

Lol!!! Hilarious, Dale.

Isn’t that what I said to you the other day??? ‘Nobody listens’ (in this case ‘reads’). LOL!!!

Anyway (and don’t ask me WHY I’ve gone to this trouble) here are some ‘helpful links’ (at least these two brokers are regulated or ‘subject to US regulatory oversight by the CFTC’ but I’d check that and I’d also check some broker reviews before ‘piling in’):

[PFGBEST | NADEX](http://www.pfgbest.com/nadex/?LSD=Active Trader PrintAdNadex &LSC=3rd Party Print Ad&BID=&CID=&BEM)

Binary Trading Options | Binary Trading | Nadex

Have fun.

Regards,

Dale.

Edit:

Hmmnnn… After a little more ‘digging’ it turns out that NADEX is part of the IG Group which in its turn comprises IG Index and IG Markets (and NADEX as noted). I stress: check out broker review sites (as many as you can find e.g. www.forexpeacearmy.com is a good start)!!! And this applies ‘across the board’ i.e. no matter whether you want to trade Binary Options, spot FOREX, Futures, Commodities, etc. You get my point.

Edit 2:

I was just thinking: who knows. Maybe I’m wrong on this stuff. Us ‘old timers’ are always very quick to ‘jump’ on new ‘fan-dangled offerings’ without checking them out properly and don’t accept ‘change’ too readily (at least I don’t). Put it this way: with the brokers listed above I don’t see any ‘guaranteed returns’ or ‘skirts’ so therein may lie the difference!!! LOL!!! If I myself WERE to look at these things (Binary Options) (and I’m not about to run out and ‘give them a bash’ on Monday morning) then those are the places I’d look (although again ‘read between the lines’ i.e. I’ve not read TOO many ‘rave reviews’ about the ‘main’ broker in question here). But you’ll quickly find out whether the broker is ‘on the level or not’. It’ll only take two or three trades. The moment you see that the Binary Option was supposed to expire at a certain time and it is held open for a minute or two AFTER the noted expiry time OR if price just HAPPENS to ‘spike’ seconds before the expiry time resulting in your Binary Option expiring ‘out of the money’ well, then, you’ll know soon enough if you’re getting ‘nailed’ or not.

Having said the above let me tell you something interesting that I’ve been noticing for the past few weeks (maybe a month or so) (and this must by NO means be taken as my sanctioning the ‘Binary Options Skirt Brokers’ and their bad ‘behaviour’). As most will know I trade only trend following systems. With the markets being as volatile as they have been of late and with them trading in a range which is so obviously recognisable even I (ME) can see the range: I’ve found myself being ‘forced’ to trade on the shorter timeframes (4-hour and 1-hour) the logic being that even although on the daily charts the markets are trading in a wide range (but not wide enough for my trading systems to stop and reverse at a profit on the daily timeframes) there are ‘mini trends’ on the shorter timeframes that make up those alternate long up and down days and that’s worked quite nicely for me (much to my surprise). What I HAVE noticed though: almost always ‘like clockwork’ price will begin to move in one direction or another just SECONDS before the top of the hour (alright: I’m talking about the major indices here of course i.e. I don’t if this anomaly exists on spot FOREX). And here I’m talking about ‘normal’ trading not Binary Options or anything else like that. So it’s not INCONCEIVABLE that even under normal circumstances, with a Binary Option, and depending on which ‘flavour’ of Binary Option you’re trading, the price will move against you ‘split seconds’ before the Binary Option expires (assuming it expires ‘on time’). Do you see what I’m saying??? It’s gotten to the point with me (on the 1-hour timeframes) that if I have a signal from my trading systems to place an order I’ll take the signal bar ‘for what it is’ a few seconds before the top of the hour. By waiting for the new price bar to open: very often priced has moved too far for me to be able to place the required stop order (so you’re left with the choice of ‘jumping in at market’ and losing some points or just missing the trade). I’ve never noticed this before because normally I’ve only ever traded the daily timeframes. This is probably totally off-topic (or is it???) but I just thought it ‘worth a mention’.

I guess there is an ultra high correlation between those ignorants and the 95% suckers in fx. I would even bet on it, lol. Just saying. Don’t be surprised they pop up everywhere, because them are so many, lol.

Have a nice weekend Dale! :slight_smile:

Ok, so we can all agree that binary options are relatively new and under regulated and many platforms that are not regulated are akin to trying to beat a casino house. Is there anyone who has had success with a legitimate, regulated binary options broker?

P.S. Thank you Dale for doing all that research (I have done the same, and it is no easy task - so, tip of the hat) and posting your findings. I think currently, only NADEX is the only US regulated broker now (I may be wrong), but there is a very small handful of foreign brokers who are regulated by foreign securities commissions (EU, etc) who allow US traders. I’m curious about US traders who have successfully traded binary options through a legitimate non-white label foreign broker.

There are many fully regulated casinos and still, the house ALWAYS wins!
They took casino 101 business plan and change the ‘Betting’ to ‘Trading’.
They pay back 75 cents for each $1. You can get better odds at Las Vegas.
But still, legal betting for everyone! Anywhere!

Haha! Agreed, Mike! I’m not at all saying Investment Bankers are providing a community service and that they just sort of like making money but love people more looks at Goldman Sachs This may be casinos for those who don’t know cards, but know charts. I have a friend who makes an impressive side income from Blackjack. I’m sure the same can be done with the legitimate, regulated binary options brokers. Just wanting to hear a success story or two.

Place your bets!

Dale thanks for the incite. Ive been trading BO’s for about a year now and have had mixed results. I feel like its a legit investment thing, but also like gambling. Is there anything wrong with BO’s besides what your saying? Ive paid and been paid in the last year and havent had any legitimacy issues… WHy is this getting sucha bad wrap? Also… How different are BO’s then FOREX??? Does it depend what site your on? Im trading on Optionmint.com. No problems thus far. Im only a 100 a trade kind of guy though. Have you heard anything about them? I havent had much an issue other then making bad trades. Any Thought?

trading with platform is not important, I withdraw $8000 binary option,work only with big boys.if you just want to wait until everyone is regulated. just wait for us to show you a $100000 before you started.I seem amount to $500000 so what is amount compare to their should they be even more worry.important make consistent money,withdraw consistently.make sure you get back whatever you invest in. what there to worry. worry you don,t make money

wow crazy stuff i been reading . gambling is the key word . i have been trading in the futures market . selling options on futures most of the time . after 12 years i have bean watching the forex and tried it with limited success . the binary options at least the hour options look good to me because you can trade straight or hedge . even get out early to protect a gain or limit your loss. the money invested can be small . any trade person in any market either stocks futures, commodities , forex or the binary has a little gamble in it . i am not a fundamental trader. i like charts and tale they can tell me to help a bit to become an educated guess. not just a throw of the dice . my thought anyway. back to binary stuff. does anyone have any good info on or for a newbee in the binary world.

get real financial market is the biggest casino whether you are forex market ,stock, commodities a big gambling machine. question is whether you are making or losing.like george soro says it not a matter whether you are winning or losing. it how much you are winning when winning and how much you are losing when losing.I like binary option because it simple and you control your win or lost

The problem with non regulated Binary Options brokers is anyone can start their own Binary Options business for under $20,000, even as low as $12,000.

So you get unexperienced people out there (with money) who start their own Binary Options business.

But they may not always have enough money to pay people their withdrawl requests or winnings.

So they use various tricks and offer bonuses, with fine print, that requires traders to spend X amount of money on placing trades…the whole purpose is to keep them in their system so their chances of losing increases, and then the Binary Options broker accumulates money as their clients lose trades. (If they get clients that are winning too often, that is not suppose to happen, they need to do quick thinking to get them to start losing trades).

They make money when you lose.

So say half their clients lose and half win on the same trade.

The broker will pay the winners from the money of the losers, and then keep the remaining for themselves.

But a problem arises when too many of their clients win trades, and the losers are minimal.

Then they not only pay the winners all the money from the losers, but will need to get into their own money and pay them some of that too.

So what happens when the broker does not have enough money to pay everyone their winnings or withdrawl requests?

Then they get desparate and start playing games, and changing rules etc.

They can get away with all of this if they are not regulated.

On top of this they are probably spending money for their lifestyle, and at the same time are not getting enough clients losing, so their income is limited.

Then when you request a withdrawl the reason in some cases it may take a month is because the Binary Options broker doesn’t have enough money to pay you so they are waiting for their clients to lose more and more so they can use that money to send you your withdrawl request.

Whether all this is 100% accurate or not I don’t know.

I first heard some of this info in this video:

Binary Options Dirty Little Secret - YouTube

I am not saying these things are true of every Binary Options broker, but just use caution.

Thanks for your break down of possible goings on with binary options…
My own experience has been that they make me an offer that for every 5,000 I put into my account they are willing to match it with their 5,000 bonus…but I have never been able to make enough winning trades to give me more than 10,000 dollars of my original account. In fact once I get down to say 6,000 they ask me to top up another 5,000 and they will also put in 5,000 bonus so now I have 6,000 plus another 10,000 giving me 16,000. then once again (they are giving the VIP signals) not all winning of course, brings me down to say 8,000 and once again I am asked to top up along with their equal top up amount…but my question is where does it end and when do I start making money without topping up all the time…has anyone experienced this??? frustrated…

I haven’t traded in Binary Options yet, but have researched it.

From what I researched it is not a good idea to accept bonus money.

Some say they use bonus money to trap you and keep you obligated, and your chances of losing trades increases.

In the post above this one I posted a link to a Youtube video I found where I think someone discusses (in a small part of the video) why you should not accept bonus money.

I always knew binary options was a bad gig. A BO broker called me and tried to get me to sign up, after having difficulty answering my skeptical questions (is binary options manipulated) i asked him if i could open a demo. He said no, you can only trade binary options live. That right there says it all folks

I gave it a shot and now I get junk emails from brokers and agents all the time. I think it would take some real luck (unless there’s a golden strategy) to make money with this kind of option trading. Without strategy or luck…its kind of a 50 -50 gamble…except that on average you’re expected to make a loss.

Why is it that binary options are given such a hard time? Have a search on these forums and you will find hundreds of similar posts where traders are condemning Forex brokers, spread-betting companies etc to hand for manipulating price feeds, closing candles early etc. I can also assure you that market makers in shares are also discredited by many for their price manipulation, particularly on smaller markets such as AIM (UK).

So why do binary brokers get such a hard time?

Well maybe the manipulation is a bit more ‘obvious’ due to the short lengths of the contracts and the expectations of the punter. It certainly happens, of that there can be no doubt I am just surprised that people are ‘surprised’ that it happens. Heck the whole current banking crisis is the result of people not playing by the rule book. The regulators failed to sort out that one so does anyone really think that they are going to do a good turn at regulating the binary industry!?!?!

The thoughts of making $$$$$$$$$$$ from trading binaries is just not going to happen. Read the small print and look at the maximum contract sizes you are allowed to trade. Most brokers won’t let you trade anything over $1-2k per contract (I think 24option have raised there limits far higher) and if you start winning at these levels then you will soon see your account closed down. Quite simply there are not that many brokers that have the ‘money’ in the bank to fund such winnings and given that most people trade tiny amounts you will stand out like a sore thumb.

You can however make money but you have to be sensible. Keep under the radar, spread your risk between brokers and trade only small amounts. Oh and avoid 60 second contracts. If they turn on the spreads you will get killed. :cool:

Simple answer, you don’t get the correct odd’s. I use the term odd’s as it’s gambling which is why in the UK they are regulated by the gambling authority, while trading margined FX is regulated by the Financial Services Authority.

If your smart you can place the same binary option trade on a margined FX account and get a better RR

Agree completely with Jezzode…the odd’s just aren’t in one’s favor with this kind of trading.

In fact I think this video explains why binary option trading, without a strategy, isn’t worthwhile…though the math is a little involved.
[video]YouTube