Are Binary Options a scam?

Binary options are not scams although it is understandable that they have gotten a reputation for being scams. This is partly due to their origins as unregulated financial instrument usually sold by casinos and partly due to their nature. A lot of people try binary options without understanding what they are and what they are doing. When they end up loosing their money it easy to feel scammed rather than admitting to themselves that they didn’t do the necessary research before they started to trade.

riskA lot of people to not understand the risk of binary options. They do not understand that they always risk loosing their entire investment. If they do not understand this before they buy the option than it easy to feel scammed when they loose their money to find out.

The binary option industry is partly responsible for their bad reputation. The industry often use aggressive marketing techniques that attracts people to the possible gains without informing people enough about the financial risks involved. Some binary option broker use what might be described as fraudulent marketing techniques. This does however not mean that the financial instrument in itself is a scam.

Binary options are in fact regulated financial instruments and all licensed brokers are bound by ethics and standards. The regulatory bodies that license binary option brokers often offer a  list of brokers that should be avoided. By choosing a licensed broker that is in good standing you guarantee that you will be trading with a broker that abide by all rules and regulations.

Binary option do in fact offer everything that is advertised. You can earn a lot of money trading binary options. You can get very high returns on your invested money. All binary options are very up front. You know exactly what is required for a binary option to mature in the money and how much money you will earn if they do. There is no doubt about what is required to benefit from the options. The fact that the binary options are 100% up front make it very hard to call them a scam.

With this said it is very important to always know exactly what you are investing in and the risk associated with it. You should always read the fine print of all investments that you make. This is not only true for binary options but also for all other investments and financial decisions that you do.