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Binary options are a type of financial product known as an exotic option. Although they may seem like a new market trend, binary options have been around since 1974. They were introduced by the chicago board options exchange (cboe), one of the largest derivatives markets in the world. However, it wasn’t until 2008 that binary options became widely accessible to the public, leading to many entities replicating the original cboe asset type.

Binary options allow you to predict whether an option will expire “in the money” (profitable) or “out of the money” (not profitable). Some unregulated brokers even permit bets on outcomes “out of the money.” the process involves making a simple yes or no prediction, hence the term “binary.” modern binary options have expiration times ranging from a week to just a few minutes, with most platforms focusing on options that expire within a single day.

There are three main types of binary call/put options:

High/low binary option

You bet on whether the price will close above or below a specific level.

Touch/no-touch

You bet on whether the price will hit a specified level at least once before the option expires. It doesn’t matter if the price closes above or below this level, only that it reaches it before expiration.

Boundary

You bet that the price will stay within a certain range above and below the current traded price. For example, you might bet that, over a certain period, xyz will not trade above $2.00 or below $1.00. If the price remains between these two values, you win.

Key points

• Binary options are an extremely volatile and questionable speculative market with both the EU and UK banning binary options in the past three years.
• Very few regulated binary options brokers exist, increasing risk to your money.
• Companies like Refundaroo can help recover money for binary options fraud victims.
• Do your own due diligence and research each binary options trading platform as well as find reviews from various users.
• Never risk more than you can afford to lose.

Binary options are overwhelmingly a scam and an illegitimate market. While the US, UK, and EU have differing financial regulations, binary options are now illegal in the EU (since 2018) and the UK (since 2019), though they remain legal in the US.

A significant reason for the EU’s ban on binary options was the dubious practices of CYSEC (Cyprus securities and exchange commission), which granted regulatory approval to numerous unethical brokers.

In the US, stricter regulations provide slightly more safety, but the high-risk nature of binary options persists. Professional speculators and investors often deride binary options, considering them more akin to gambling than legitimate speculation.

Binary options robot scams

Day traders, especially those familiar with Forex or Futures markets, may know about robots (or ‘bots’) used in trading. Binary options robots, marketed as account managers, require you to share account details or an API for automated trading. These scams often involve high-pressure sales tactics, false promises of high returns, and misleading graphics depicting a luxurious lifestyle.

Binary options software scams

Software scams in binary options often involve programs claiming to use advanced ai or machine learning to generate high returns. These claims are usually false, with the software providers making money by selling the software rather than through successful trading.

Binary options trading scams

Trading scams are rampant in the binary options market. Due to regulatory bans, many brokers operate in countries with little to no regulation. These brokers often use fraudulent data feeds, causing significant losses due to erratic price changes. Only a few regulated brokers are legitimate, so caution is essential.

Binary options signal scams

Signal scams, the most common financial fraud, involve selling trade ideas (signals) for a monthly fee. These signals are typically sent via text, email, or chat platforms like telegram. It’s best to avoid signal providers, as they primarily aim to profit from subscribers.

If you’ve been scammed in binary options, don’t give up hope. Refundaroo specializes in recovering funds from fraudsters. We use methods like chargebacks, working with you and your card company to report fraud authentically. You’ll work with the same caseworker throughout the process.

Use regulated brokers: In the US, legitimate brokers are regulated by the CFTC (Commodity Futures Trading Commission) and the SEC (Securities and Exchange Commission). They will disclose their license number and regulatory agency.

Do your due diligence: Read user reviews from various sources. Be cautious of review sites focused solely on binary options brokers, as they may be biased.

Check the broker’s location: If the broker is unregulated, verify their headquarters’ location to understand the regulatory environment.

Test the broker’s data: Vet the broker and ensure their data feeds are authentic with no abnormal price changes near expiry.

How do binary options robot work?

Binary options robots utilize various mediums, with the primary being an executable software program. Another method involves sharing account information for the robot to conduct trades on your behalf.

What is binary options trade copying?

Binary options trade copying operates similarly to robots and signals services. Essentially, it links your brokerage account to a ‘master’ account, automatically executing trades on your behalf.

If you have fallen victim to a dishonest binary options broker or a service that misrepresented its performance you still have options to recover some or all of your money.