Helping you avoid the scam brokers and find the legit ones is why we created the trader driven Binary Options Blacklist. The binary options industry experienced an increased in popularity lately.
Traders from all over the world now have access to an industry that prides itself as being the simplest form of trading. Many brokers simply fly under the radar. For this, they use offshore companies. In other parts of the world, trading binary options is simply illegal. As such, the industry is plagued with scammers. Not all brokers fall into this category, though. Many of them run eligible businesses. Traders have the impression binary options is an easy game.
First, this is not a game. Second, it can be anything, but trading binary options is not easy. When compared with other financial products and financial sectors, trading binary options comes with a handicap.
From the start, the traders must use a risk-reward ratio that is unfair. To put this into perspective, imagine the Forex industry.
This means that for every pip or amount risk, the expected reward is minimum two times. This gives room for error and allows traders to incorporate losses while the account still grows. From the start, traders face tough conditions. All you should do as a trader is to guess the direction of a market or financial product. Namely, if you think the price of an underlying security will move to the upside, then you should trade a call option. Note that you can only buy an option.
A put for a bearish setup and a call for a bullish one. When compared with Forex trading, the difference is that a Forex trader buys or goes long, and sells or goes short. Moreover, when it comes to binary trading, traders must set an expiration date. In fact, a binary option has two elements traders need to decide upon: In plain English, a point in time when the comparison between the striking price and current price will be made.
Based on the outcome, it is said that the option expires in the money or out of the money. The pros of trading binary options come from the simplicity of the product. Moreover, with a sound money management plan and avoiding short-term expiration date, trading binary options is a nice way to diversify a portfolio. Unfortunately, the cons overcome the pros. Because traders need to indicate the time element. The holy grail in trading is price and time, and binary options include them both.
As mentioned earlier, the industry is plagued with binary options scam brokers. Because of this, it is very difficult to read a positive review even for good brokers. Traders must know one thing in advance: This is not valid only for the binary options industry. The financial authority that regulates a broker gives a license number. To be regulated, the broker must follow specific rules and have a specific conduct when doing business.
The license can be suspended if the financial authority finds out otherwise. Unfortunately, regulation costs money. As such, they register the company in an offshore environment, without being regulated by a financial authority.
From this moment, scamming people is quite easy. This is similar to the Trojan horse in the Greek drama story. The thing is that the brokers offer the bonus but tie it up to a super-unrealistic trading volume. Statistically, in Forex trading, over ninety percent of retail traders lose their first deposit. In binary trading, the chances are even bigger than the ones in the Forex industry. We use the comments here on the binaryoptionsblacklist.
A green badge means the broker is trustworthy, according to the median of the comments here, and is verified. An unverified broker gets an orange badge, while a scam deserves nothing but a red badge. Approved — A green badge means this is a broker that we trust.
We would and or do trade with today. They have a positive reputation in general, a track record of integrity, fairness and competitive returns. We feel most confident trading binary options at these sites. Use Caution — A yellow badge means that we have not done enough research to decide on this broker yet.
This is a broker that has been recommended by others as a place to trade. There was not enough info to make an informed decision about the broker to rate them green or blacklisted.
Comments and trader reviews highly encouraged on yellow rated sites to help educate everyone and update our ratings. BlackListed — When a broker has the blacklisted red badge this means that we would not trade there. There is enough negative information found through our research that we decided this is not a binary trading broker that we would feel comfortable depositing money at. Since we would not deposit our money there, they get the Black List badge.
Without being regulated, a broker will always have a dark shadow on its name. A good example comes from the Forex industry. However, because they were regulated, the clients could receive the money from their trading account. It took a few months, but the whole process was well-communicated and there was never a shadow of a doubt that the financial authority would not step in.
As such, regulation is a must. Regulation comes with specific conduct. A broker cannot simply do what it wants with the funds it receives. Tougher regulation comes with segregated accounts. It means the funds deposited will not be touched by the broker. The broker will only earn from commissions and fees. Or, if it does, it is quite small. They leave the option in the hands of the trader and use the time they trade to offer the best possible trading experience.
Starting with the opening of an account process and ending with withdrawals, there should be no flaws what-so-ever. Typically, a good broker will have good reviews. However, even reviews are sometimes scams. Because of the tough competition, people are sometimes paid to say things about a broker.
Other things like the possibility to trade on a demo account, to choose if you want a bonus or not, if the broker offers a trading app or not — all these are part of a good broker. However, everything comes after regulation. Unfortunately, the binary options industry has a bad reputation. The problems start from the way the industry is advertised. Traders should know that buying a call or a put option requires the same strategy as buying or selling any financial product.
Therefore, everything is the same. How many of you saw at least one commercial in your Inbox or online saying that the lady that sells groceries just made a profit of a thousand dollars in a day? Probably all of you. Why would anyone advertise like this? Moreover, why would anyone believe this is true? The process is the same: What makes binary options even more difficult is the time element. Traders must choose an expiration date for their option, on top of the right direction. Scam brokers will always push for traders to trade more and more.
Especially short-term to very-short-term expiration dates. In fact, the chances to be consistently profitable trading one-minute or five-minute binary options are almost close to zero.
Moreover, unverified brokers use the same principles as a market maker broker does in the Forex industry. They keep all their orders in house and bet on the fact that the clients will eventually lose their funds.
When that happens, they book the funds for themselves. There are plenty of software specialized in mirroring quotations. That is an interesting topic to consider it, especially if traders want to find verified brokers. There are several things to consider. If the broker is regulated, it means a financial authority verified it and its activities.More...