How to Identify a Binary Options Scam?

A binary options trading scam can be easily identified and avoided as long as you know what to look for. And with the right information and education, you will be able to understand certain signs to determine a broker’s reliability. Here are some useful steps that you can carry out protect yourself from being scammed:

• Make a background check. Never entrust your money with a broker that has only appeared overnight. Make a background check about the brand and determine how long it has been in service.


• Fully test the platform. You can easily identify if a broker is a scam by personally evaluating its trading platform. It is best if a demo account is available so if this is offered by your broker then take advantage of this feature. If not then, you can simply browse through their website to evaluate the quality of the platform.


• Contact their customer service department. Just because the brand is showing that they can be reached via email or phone doesn’t mean that they are already trustworthy. What you need to do is to communicate their customer service department and if you do get answer or reply then throw in some inquiries or questions so you can verify they can be answered completely and the response times are acceptable.


• Read online reviews. Simply using Google can help you get reviews about the broker that you wish trust your investments with. Be wary though of bogus reviews that you encounter telling you false information about a certain brand. Checking out comments or forums will give you more reliable appraisals.


• Identify the supported payment methods. A reliable broker should support a number of payment methods for banking such as known credit card brands and other popular payment methods. It is also important to check if there is a secured socket layer (SSL) encryption which guarantees the safety of your financial details. 

• Consider the payout rates. Never get tempted if a broker is offering extremely high payout rates. Trusted brands normally offer a range of 60% to 85% payout for options that expire in the money. Unreasonably high rates should give you a heads up about the platform’s reliability.


• Never fall for huge bonuses. Aside from the payout rates, bonuses are the selling factors of these brokers offering substantial amounts in exchange for depositing real money. Scammers usually have unreasonable requirements before bonus funds can be withdrawn making almost impossible fulfill.


• Read through the fine print. It always pays to be vigilant. Make sure that you have completely browsed through the terms and conditions page and checked if there are any loopholes or ambiguities before you make any fund transfer.


• Try if you can withdraw money from your account. If you are having a hard time cashing out your winnings or your funds then it is could be an indication that it is a bogus broker. Only deposit the minimum amount that is accepted and check if you can withdraw your funds once you have made a few trades.


• Communicate with real traders for help. The best way to get real information and feedback is by getting opinions from real traders. Online communities like forums or even seminars can be a good avenue for exchanging personal recommendations on which brands are good and which ones are not.