7 Red Flags That Indicate A Potential Binary Options Fraud

flagsBelieve it or not, the biggest challenge in making money trading binary options is not figuring out which assets to trade or how to time your trades. It’s finding legitimate binary options brokers you can trust with your money.

The industry is largely unregulated. But even brokers that are regulated may not necessarily be on the up and up. Some of them will try to keep your money, no matter how many withdrawal requests you submit. That’s why it pays to keep your eyes open for signs of binary options scams. What good does it do to make profitable trades if you can’t withdraw your winnings?

The good news is that it’s relatively easy to avoid the frauds. It’s a matter of knowing what to look for. Below, we’ll give you a quick guide you can use to vet new binary options brokers. If the broker you’re thinking about trying shows any of the following 7 red flags, run in the other direction.

Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
90% $10 $1
 
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85% $100 $5
 
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80% $5 $1
 
80% - 90% $250 $5
 
85% $250 $5  
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
95% $250 $1
 
80% $10 $0.10
 
160% - 180% $50 $2
 
95% $250 $1
 
90% $250 $1
 
80% - 90% $250 $5
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
200% $50 $10
 
95% $250 $1
 
90% $50 $1
 
80% $5 $1
 
80% - 90% $250 $5
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  200% $50 $10
 
  85% $200 $20
 
  85% $100 $5
 
  95% $250 $1
 
  85% $10 $1
 
  80% - 90% $250 $5
 
  85% $250 $5  
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
90% $10 $1
 
200% $50 $10
 
85% $50 $1
 
85% $200 $20
 
85% $100 $5
 
95% $250 $1
 
85% $10 $1
 
80% $5 $1
 
80% - 90% $250 $5
 
80% $250 $25
 
85% $250 $5  
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
90% $10 $1
 
90% $50 $1
 
85% $100 $5
 
85% $10 $1
 
85% $50 $1
 
85% $200 $20
 
95% $250 $1
 
80% $250 $25
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  85% $50 $1
 
  200% $50 $10
 
  95% $250 $1
 
  85% $200 $20
 
  85% $10 $1
 
  85% $100 $5
 
  80% $250 $25
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $50 $1
 
  95% $250 $1
 
  85% $10 $1
 
  80% - 90% $250 $5
 
  80% $250 $25
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $50 $1
 
  85% $100 $5
 
  95% $250 $1
 
  85% $10 $1
 
  80% - 90% $250 $5
 
  80% $250 $25
 
  85% $250 $5  
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $250 $10
 
  85% $50 $1
 
  85% $100 $5
 
  85% $10 $1
 
  95% $250 $1
 
  80% - 90% $250 $5
 
  80% $250 $25
 
  85% $250 $5  
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $50 $1
 
  85% $100 $5
 
  85% $10 $1
 
  95% $250 $1
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $50 $1
 
  85% $100 $5
 
  85% $10 $1
 
  95% $250 $1
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $50 $1
 
  85% $10 $1
 
  95% $250 $1
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $50 $1
 
  90% $50 $1
 
  85% $10 $1
 
  95% $250 $1
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $10 $1
 
  85% $50 $1
 
  95% $250 $1
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
90% $10 $1
 
85% $200 $20
 
85% $100 $5
 
95% $250 $1
 
80% - 90% $250 $5
 
85% $250 $5  
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $100 $5
 
  85% $50 $1
 
  85% $10 $1
 
  95% $250 $1
 
  80% $250 $25
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  200% $50 $10
 
  85% $250 $10
 
  85% $50 $1
 
  85% $100 $5
 
  95% $250 $1
 
  85% $10 $1
 
  80% - 90% $250 $5
 
  80% $250 $25
 
  85% $250 $5  
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
200% $50 $10
 
95% $250 $1
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  200% $50 $10
 
  85% $250 $10
 
  85% $200 $20
 
  95% $250 $1
 
  85% $10 $1
 
  80% - 90% $250 $5
 
  85% $250 $5  
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  85% $50 $1
 
  200% $50 $10
 
  85% $200 $20
 
  95% $250 $1
 
  85% $100 $5
 
  85% $10 $1
 
  80% - 90% $250 $5
 
  80% $250 $25
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
95% $250 $1
 
85% $10 $1
 
80% - 90% $250 $5
 
85% $50 $1
 

 

#1 – Outlandish Promises Of Profit

You’ve no doubt seen the claims. Many brokers promise that you’ll reap huge profits within minutes of registering your account. Make a deposit, execute a trade, and voila! Big winnings, right?

Not so fast.

If making money with binary options was really that easy, why would anyone keep their day jobs? They could sit at the beach all day, making profitable trade after trade. The fact is, making money on a consistent basis with binaries is hard. Not impossible, just hard. Even professional traders have a difficult time doing it.

Can you make huge profits trading binary options? Absolutely. Just realize that it’s not as easy as many brokers claim. And the ones who claim it is shouldn’t be trusted.

#2 – Tons Of Customer Complaints

When a lot of people complain about a particular broker, there’s a good chance that broker is involved in some shenanigans. And if everyone is complaining about the same problem – for example, withdrawals that get “lost in the mail” – proceed with extreme caution.

The internet makes it virtually impossible for shady binary options brokers to hide their mischief. Angry customers are quick to take their grievances online, posting about them on blogs, forums, Facebook, and Twitter. Complaints are easy to find via a quick search on Google.

That’s not to say every complaint is valid. Lots of beginning traders grouse about things that are their own fault. For example, they might moan and groan about bonus offers that come with restrictions, when the restrictions are explained in detail on the broker’s site.

Having said that, if everyone is grumbling about manipulated trades (see below), there’s usually a good reason to write off that broker.

#3 – Repeated Trade Manipulation

It’s a scary thought: a binary options broker that wantonly exploits their trading software to take advantage of their customers. But that’s exactly what some companies have been caught doing. And there are probably many others doing the same thing without their customers even realizing it.

Here’s how it works: let’s say you execute a basic call on gold. The trade is set to expire in 15 minutes. Suppose that at the posted expiry time, the price of the option is indeed above the target price. Unfortunately, the trade fails to expire as planned and instead remains open for another minute. By the time it finally expires, the price has descended below the target, resulting in a loss.

Can this sort of thing happen without the broker’s knowledge? In other words, can it occur due to a random software glitch? Sure. Anything is possible. But that’s like asking whether it’s possible that your car’s steering and brakes fail at the same time while you’re driving downhill.

Possible? Yes. Likely? No.

Needless to say, if you notice trades expiring late, it’s time to look for more reputable binary options brokers.

#4 – Difficulty Getting Your Money

This is the one of the most common complaints among traders. A lot of brokers put up obstacles that make it all but impossible to withdraw cash from your account.

Some companies will impose draconian rules that force customers to meet ridiculous requirements. Others will charge huge fees to process withdrawal requests. Still others will outright lie to their customers, claiming the proverbial check is in the mail. Of course, the check never arrives.

To be fair, it is possible for withdrawals to be processed slowly on occasion, especially during holidays. It’s also possible that a check gets lost in the mail every now and then. But if it happens over and over, something is clearly amiss. And it’s probably not the U.S. postal service.

There’s no reason to trade binary options if you can’t gain access to your winnings. Find a broker who makes the process easy, smooth, and problem-free.

#5 – Nonexistent Support

Customer support is more valuable than a lot of folks think. Most new traders imagine that they won’t need any support. After all, the trading process is straightforward. Deposit funds, pick a trade, select an amount to bet, and watch the trade expire in the money or out of the money.

Simple, right?

When everything goes according to plan, there’s no need to get in touch with a support rep. But things don’t always go according to plan. Small issues can arise that need to be resolved. Or you might have questions that need quick, clear answers. And that’s when getting someone on the phone or via chat can be a huge benefit.

When there’s no one providing support, getting small problems resolved can become a nightmare. And getting answers to questions? Forget about it.

We highly recommend getting in touch with support reps at any broker you’re thinking of using to trade binary options. If you can’t reach anybody, think twice before making a deposit. Click here for our list of top 10 customer service binary options brokers

#6 – Support Reps Who Stall For Time

Here’s another potential support problem. You can get in touch with people at the broker’s site, but you can’t seem to get any help from them. They don’t actually solve your problems. Nor do they provide clear answers to your questions. Instead, they keep stalling for time while encouraging you to make further deposits.

For example, let’s say you requested a withdrawal, but you haven’t received it in the mail. A month goes by, and you finally decide to call the broker’s support number to followup. You explain the situation to the representative, who tells you that she’ll look into it and call you back with details. In the meantime, she encourages you to continue trading.

A week goes by and you still haven’t heard from the rep. You call and speak to another representative. He claims to have no idea about the problem. He too promises to investigate and get back to you with a resolution (sound familiar?). In the meantime, he encourages you to keep trading.

And on and on it goes.

Some brokers seem to have gotten this scheme down to a science. They string their customers along, promising resolutions and answers that fail to materialize. It’s a shady way to do business. Avoid any broker that pulls this sort of stunt.

#7 – No Track Record

This one is simple. If a broker doesn’t have a track record, be very cautious about using them to place trades. There’s no way to know what you’re getting yourself into. Is the broker legitimate? Is it a scam? Will they manipulate trades to their advantage? Will you have any trouble getting money out of your account?

It’s like buying a gold watch from a guy on a street corner. There’s a lot of risk involved. Plus, given the number of reputable binary options brokers out there (be sure to check our updated list), there’s no upside.

Simply put, buyer beware.

Are You Working With Trustworthy Binary Options Brokers?

If the broker you’re using has shown every sign of being a legitimate, reputable company, there’s probably no reason to be concerned. Just stay on your toes and keep your eyes open for potential problems.

If you’re using a company that is not on our list of recommended binary options brokers, now is a good time to consider making a switch. In this industry, things can go south quickly. It’s better to use a broker that has been exhaustively vetted to minimize your risk.

We personally like TradeRush, GlobalTrader 365, MarketsWorld, and several others. We’ve reviewed each of them on this site, so you’ll have all the details you need to make an informed decision. You’re unlikely to find any of the 7 red flags we’ve covered above at the brokers on our recommended list.

Use these articles to continue your research: