Scam Alert – Binary Options

Scam Alert - Binary Options

For about a year now I have been getting call after call after call trying to get me to take part in a new type of investment. These calls come from different companies, but they have a few things in common. The first is that they offer me the opportunity to invest in binary options. The second is that they are operated, it seems, from Israel, and thirdly, they are all scams!!

I’m an options trader. This means that I trade options on a regular basis. I trade index options on the Australian Securities Exchange (ASX). If I believe that the ASX200 (an index composed of the largest 200 companies listed on the ASX) will rise then I purchase call options. If the index rises then I make money. If, on the other hand, I believe that the ASX200 will fall, then I buy put options which will rise in value when the market falls. I also write options, but this is another story and is beyond the scope of this scam alert. Put simply, I know what options are, how they work, when you make money and when you lose money on them. One thing is certain, options are NOT an investment!

Binary options are just a joke! With binary options there are two choices – up or down. If you believe that an asset will rise then you buy call options. If you believe that an asset will fall then you buy put options. This is pretty much what I do, however, there are some very important differences. With index options I trade the ASX200 index. When I buy, sell or write options I ensure that they have a life of at least a few weeks, or better still…MONTHS!!! So, when I buy an ASX200 put option I buy one that expires in a few months from the time I purchase it. This means that for me to make money the market has to fall within a few MONTHS. I make such purchases because as a seasoned trader I know that it is incredibly difficult to predict the direction of the market since there are so many different factors which influence it. Sometimes the most obvious scenario does not come to fruition because of an external event. So what looked like a guarantee of a market fall, in fact, ends up in a market rise and the value of the options drops HARD!

What about our binary options? Well, our friendly binary options “experienced dealer” we tell us that you can make quick money with them…literally. Binary options can have an expiry within a minute! So if you believe that gold will go up within the next MINUTE, then you buy one minute expiry gold calls. Great. All I want to know is, who is so clever that they KNOW that the gold price will rise within a minute? Ahh, so you don’t “know”, but you “think” that it will rise? Well, in that case it is called gambling and that is the same as you “thinking” that the roulette ball will land on red and not black. This means that roulette, it seems, is also an investment opportunity since it functions in essentially the same way as binary options in that you have a possible outcome of red or black. For those of you who want to get technical and mention the green 0 or green 00, let me get to that later.

Let’s cut to the chase and focus on the scam.

There are, actually, a number of scams involved here.

Firstly, binary options are NOT an investment. They are a fancy type of gambling structure where the only thing fancy is the name, as it sounds vaguely similar to the financial instruments that I personally trade. To “win” you have to correctly “guess” the direction of the movement of the asset class in a particular time period. It could be a minute, five minute, ten minutes or fifteen, as a few examples. Asset classes vary depending on the “broker”. If you don’t feel too confident in being able to constantly “know” the direction of the movement in the gold price within a few minutes, then maybe you can try your knowledge with the US currency against another currency, such as the yen or pound or many other currencies. Some “brokers” allow you to “trade” an index. It really doesn’t matter what the asset class is that you “trade”, it works the same way. That asset class has to go in the direction of your “trade” within the set period of time. If it doesn’t, then you blow your dough. You lose your whole “investment”. If it goes in your direction then you get up to 185% of your “investment” back i.e. your initial “investment” and another 85% on top of that.

Let’s just say that you have thought this over and you are convinced by my arguments that this is not an investment but rather a gamble. You are actually pleased about that because you don’t have an investment mind but you really do love to gamble. So what is the problem? Well, there is no problem, but the question remains as to why you would want to pursue this gambling opportunity when you can just go to the casino and place your bets on red or black and get a better return. At the casino if the trade┬ábet, does not go your way then you lose your investment. Sorry, I mean your wager. With binary options you also lose your wager, I mean investment, if the gamble, SORRY, I mean trade, does not go your way (this is all too confusing now!!). So here you lose 100% of your cash and there you lose 100% of your cash. However, at the roulette table you double your cash if things go your way. With binary options you do not double your cash if things go your way, you make 85%. So the house broker has a 15% advantage PLUS a transaction fee on top of that. At the roulette table you don’t need to pay a fee for playing and the house has the advantage because of the one or two green zeros (depending on the type of roulette it is). However, even with the green zeros, the advantage that goes to the house is only a few percent and not 15%+++. Some binary option “brokers” have a payout of even less than 85%, so you are really getting screwed there.

Now that I have you reading, let me get to the real scam. The above is just a scam lite, since it is ONLY based on deception, lies and misrepresentation. Now we get to the big one.

Almost all, I repeat ALMOST ALL binary “brokers” are unlicensed and officially registered in very questionable countries. How do the Seychelles sound to you? What about Bermuda? Now that is just the official story. My research has uncovered a number of sleuths who have been investigating these crooks and have found them to be located in Israel. These detectives have been computer literate and were able to follow the internet trail back to Israel. In fact, almost all of the “brokers” seem to be connected one way or another and based in Israel. Another common denominator about them all is that they provide a UK address as their headquarters as well as being registered in weird places which most people would not be able to find on the map that did not have country names on it. These “investment houses” are not regulated and if you get a call from one then you will be getting calls from many others too :) You will also find that the addresses provided are virtual offices or offices which do not have these crooks as tenants. In other words, it’s all made up. Why?

Very simple.

As with any traditional broker, you have open a brokerage account if you want to “trade” binary options. The difference between a traditional broker and these scammers is that you will not see your money again with the binary options “broker”. Once you deposit your cash to the Seychelles bank account, that’s it!!! Treat is as a donation to the Israel economy, so I hope you like jews. You will not get the cash back. I have heard many tactics for not paying out. The most extreme is when you actually do make positive trades and your bank balance rises then your account will be blocked and you accused of “hacking their systems”. Now, because these are good crooks, they will not tell the police or fraud squad. No, no. They will just freeze your account, tell you that they know you have conducted illegal hacking and as a punishment they will freeze your account and ban you. Off you go!! There are many other tactics they use, and these are based on the situation, but to cut a long story short, YOU WON’T GET ANY CASH!! So forget it, and there will be nothing you can do. It is this theft and embezzlement which is the reason why the organisations operate from fake locations, are not registered and hide. They are organised criminals.

If you ever get a call from a binary broker, then you will also be getting calls from a few others within the next month or so. The plan of attack is simple. Don’t say no. That won’t work. They will keep ringing and ringing from various named organisations. Be polite. Show them your interest AND DEMAND A SKYPE VIDEO CONFERENCE!!! After all, this is a serious matter or investing and it is only good practice to sit down with someone eye to eye and discuss investment options and get to know the personal broker who you will be entrusting for your investment advice. Quite clearly, you won’t be in the UK as they are not stupid to call someone from the city who can check on their fake location, so meeting face to face will not be possible. Have no fear!! The 21st century is here!!! So a video conference is the way to go.

I’ll be honest you with you. I do not know which way the price of gold, silver, copper, the US, Australian or Hong Hong dollar will move in the next one, five or fifteen minutes. I don’t even know whether the ASX 200 will be higher next week than it is now. However, I know something for sure. I can give you a 100% risk free, money back guarantee that you will not have a face to face Skype conference with not one or any of the scammers who have called, and will be calling you. I don’t know which excuse they will give as there are so many options available, but I know you will not see any one of them. You wanna bet?

Peter Solanikow
Peter Solanikow
Peter Solanikow is a tertiary educated and qualified business consultant and options trader based in Melbourne, Australia.
Peter founded A1 Tuition, an education resource provider, in 1997 at the age of 23. Peter has written a number of educational books as well as presented seminars in accounting and economics.
Over time Peter developed an interest in business management and has assisted hundreds of clients from various countries around the world in management, marketing, strategy and finance matters.
Peter travels to Europe annually and has knowledge and experience in business matters relevant mainly to Poland.

Leave a Reply