Would you say that guessing the outcome of a coin toss is sound investment strategy?
Such “coin tossing” is the name of the game with binary options trading, a dubious (also known as exotic) investment strategy that some traders use to make money.
What is binary options trading?
In binary options trading, investors purchase either call or put options on stocks and commodities for a defined period of time. If a call option is purchased, the investor expects that a stock’s or commodity’s price will appreciate by a given amount of time. If a put option is purchased, the investor expects that the stock’s or commodity’s price will drop by a certain amount of time.
If the investor’s prediction comes true, she earns a set payout; in other words, her option expires in the money. Conversely, if the investor is wrong, she loses her money or, in trading parlance, her option expires out of the money.
Let’s say that, on Monday, an investor buys a call option of ABC Inc.’s stock with a strike price of $200. This call option carries a payoff of $1,000 should it expire in the money in 3 days. Come Thursday, if shares of ABC Inc. close at $200 or higher, the investor makes a grand total of $800, or $1,000 minus $200.
However, if ABC Inc. stock falls to $199 on Thursday, the investor loses that $200 investment.
Is binary options trading a scam?
At its most basic level, binary options trading is not a scam. Many reputable brokers, including my very own E-Trade, offer options trading.
Unfortunately, because binary options trading hints at the idea of making quick cash, it has fallen prey to a lot of different get-rich-quick scam sites. Examples of such sites are too numerous to name in one article but include well-known binary options scams like Secret Millionaires’ Club, Push Button Millionaire, and 60 Second Cash App.
Something’s fishy when you have a 50% refund rate
These scams all work on the same premise: They all state that there is some secret app or software program that enables the ordinary investor to beat the 50/50 odds of binary options trading. Sometimes, this tool is even given away for free.
However, there’s a hitch.
If the investor wishes to use the software tool, he must first fund a “special” account that allows him to use the software platform. His special trading account will also often have a payout threshold of several hundred dollars. As a result, a binary options trader who just wants to take his initial winnings and run is forced to keep buying options until the threshold is reached. During that time, it’s fairly easy to lose the winnings as well as the original investment.
At this point, many options traders get fed up and ask for refunds. Some programs experience over 50% refund rates from disgruntled traders.
However, these programs are not in the business of returning money, only taking it. Here is just one complaint about Binary Matrix Pro:
I followed the links and signed up to your RECOMMENDED Broker/s. I followed every step and paid my money to Beeoptions. Even submitted the verification documents. So far, as of 03/14 the Broker has my money, both the Binary Matrix Pro web client and standalone clients continue to respond: “License Expired or does not exists. Please contact our support team at email@example.com to check how to extend it.” On Wednesday 11/12 I emailed firstname.lastname@example.org and explained: “I’ve signed up and deposited with beeoptions and I’ve downloaded the software. Both the web versions and the download versions says that it can’t find my account!
Incidentally, Paul Applegarth has a wealth of information about the Binary Matrix Pro scam (thanks for the info, Ross Murphy!).
There are similar complaints posted against similar options trading schemes such as TradersRoom. What amazes me is that this person was scammed by one broker, and then went to another scam broker!
Beware of Binary Options. After being scammed by one broker I tried another, Tradersroom.com and was scammed again. Despite of promises to give me advice and guidance on investing and helping me supplement my income all this broker was interested in was for me to invest another $1,000. Had I followed their advice I would have lost that, too. Their so called “advice” turned out to be disastrous. They gave me bonuses so that I could continue to trade, but they lost those also, telling me what trades to make. When I quickly lost my investment I asked for a refund, and their only reply was “We do not give refunds”. So I guess I am stuck. And dealing with a company located in a foreign country like the rest of them, and their refusal to give their address makes it impossible to find the attorney general to report the fraud taking place in their country.
Money? What money?
Many binary options trading scams will even give you bonus cash after you fund your account, making you think that you’re really coming out ahead with the better than average trading odds plus free money.
That is, until you try to withdraw your funds. Here is a screen shot of one trader’s account on TradersRoom:
There are complaints aplenty about TradersRoom as well as other binary options trading sites from traders who have requested withdrawals numerous times yet to no avail. When calls are made to the “customer service” department of the scam site, the issue is typically blamed on software glitches.
However, these technical glitches don’t occur when account deposits are made.
Sometimes, traders don’t read the fine print about bonus cash deposits- in most cases, traders must trade a high multiple (think 30 times) of their original deposit and bonus money in order to withdraw funds. This is intended to induce traders into depositing more and more of their own money, which of course means more trading commissions for the site.
Where do binary options trading scams live?
Have you heard of the affiliate network Clickbank? Well, Clicksure is like Clickbank’s evil twin. The site posts and promotes numerous “opportunities” to get-rich-quick by selling get-rich-quick programs such as these:
Once you place your order with Clicksure and get scammed by the product, don’t expect to get your money back. In fact, the repeated issues with Clicksure products have made most US banks wary of releasing funds to these scammers- several Clicksure users report how their banks called them up to make sure their credit cards hadn’t been stolen!
How does Clicksure not get sued and shut down by the FTC? Because it’s not located in the US. In fact, the network operates out of two offshore locations: Hefei, China and Grand Baie on the island of Mauritius.
Clicksure has a long list (200+) of complaints on Scambook. Ripoff Report also lists several complaints. Here are just a few examples:
On 12th of February I bought a package of $20 from them,only to find out on the 13th of February where my bank statement showed that I bough another package of $200 which I didn’t carry out, now they av to block my account and now am suffering for something I didn’t it’s really bad.
I cancelled all the above #Mobile Money Code #Affiliate ClickSure and #Hostzilla purchases on the very next day all with confirmation 20/01/2014 I have contacted them countlessly for 2 weeks only to get a Automated email response, I also called them today 05/02/2014 on the number +230 263 4400 I just got nowhere with this call the people I spoke to said they were all new at this job and didn’t know what they were doing and apologized, THIS WAS VERY WIERD!
This company provides the means for Automated Income App & Avalanche X to be promoted by affiliates. Both these products are scams which I’ve tested as an affiliate inconjunction with promoting. Automated Income App (AIA) is the one I’ve written a separate complaint about in detail which has cost me the rounded off $700 & Clicksure refuse to enable me to contact AIA via their relationship even though I’ve explained that AIA do not respond to any of their email addresses. Clicksure will not mediate on my behalf or assist in resolution.
I opened an account for Clicksure, made a small purchase to open the account and after two days I attempted to log back on the account I got a failed attempt response and hours later got an email form my bank about of suspicious transaction attept from the same merchant (clicksure). Be aware of Clicksure which is a Total Scam!!
Clicksure: The place for binary options trading scams
It seems that binary options trading scams have a preferred place in hell- and by that I mean Clicksure. The site boasts at least 58 different binary options affiliate marketing “opportunities.”
The bottom line here is, if you get involved with Clicksure and/or its promoted affiliate products, don’t expect to get your money back or make a profit on those advertised products. However, since you have come across this report now, perhaps you won’t make the mistake of getting involved with this scam network of binary options scams.