Binary options may promise to make you money quickly, but like gambling, you could lose all of the money you’ve invested.
Things to look out for
Making money from investing in binary options isn’t as simple as it looks
Most online platforms make binary trading look easy by promoting a simple three-step process – online tutorials, educational materials and pop-up chat boxes. Don’t be fooled. Guessing the short-term movements of a share price, currency, index or commodity is extremely difficult, even for professionals. It’s possible to lose a lot of money trading in this way.
Options offering high payouts (up to 500%) are likely to be structured in a way that makes the chances of winning quite low
If it seems too good to be true, it most likely is.
Some trading platforms have refused to credit customer accounts or reimburse accounts after accepting money
Most foreign traders are unregulated. This means there’s little oversight and there’s a higher risk the provider may default on its payments or the investment could be a scam. See our avoid scams page for tips on how to protect yourself.
By investing in binary options, there’s a higher chance you could become a victim of fraud
Online platforms may not be regulated, which makes fraudulent behaviour much easier. We’ve been advised of platforms manipulating software so the provider doesn’t have to pay out. Examples include changing the duration of the trade so it generates a loss or cancelling the trade altogether.
Another example of fraud is identity theft
This is where online platforms use or share the customer information they collect, without the customer’s permission.