First off, before we answer if your binary options broker is scamming you, we’d like to point out that often times when traders feel they are being ripped off, it’s actually the trader screwing up.
The very first thing you should do is understand that the brokers have the house edge. Understand that it is not easy to win. If it were easy, everyone would do it. You need to really ask yourself if you’re responsible for your losses before pointing the finger at the broker. There are a lot of situations where it seems easier to blame your broker for what’s happening and move on, only to find the same thing happens again because the problem involves your trading.
With that out of the way, yes, it is possible that your broker is ripping you off if you suspect that it’s happening. Especially if you are trading with an unscrupulous broker. While binary options trading is a legitimate trading vehicle, there are a lot of companies out there which are not legitimate brokers. They will manipulate prices, entries, expiry times, and other aspects of trading in order to profit off traders.
And the thing that really gets us about brokers cheating….
Is that they already have a built in house edge! It should hardly be “necessary” to cheat when you have a pretty strong edge to begin with. But nonetheless it’s reached our attention that it’s unfortunately very common. It is something to watch out for. Some companies will even try to do this when you’re demo testing!
Breaking Down The Scam
One of the most common scams involves expiry prices. Let’s say you’re doing 15-minute trades. Your trade should expire exactly at the end of that 15-minute trade. If it goes over 15 minutes at all, you are being cheated. Yet you’d be surprised to find out how many brokers will allow the clock to run over into 16 minutes (or more), and then take your money since your trade which would have expired in the money has now expired out of the money. It happens.
What happens when you try to ask the broker why the trade ran over?
You might get excuses about volatility or overloaded servers or some other chatter, but you are not going to get your trade reversed. And what are you honestly going to do about it? Most people are going to do nothing about it, because can you really afford to pursue the broker to try to get your money back? Companies that do this sort of thing usually get away with it, and will continue to for quite a while. This is why you can avoid problems like this with a careful selection of where you trade options online.
Perhaps when the online binary options market becomes more regulated, you’ll see a lot less of this. But in these early stages, you have to watch out for scams like expiry price manipulation.
You can avoid scams like this by choosing a broker with a solid reputation and established history and if possible, regulation. For as little as a $500 deposit, you can open an account at Banc De Binary and experience world class customer service and one of the most respected and popular trading platforms on the market today.