Binary Options Scam
If you’ve had the misfortune of being scammed by one of the thousands of fraudulent Binary Options brokers operating online, Traceyourassets is here to help.
We are passionate about empowering our clients to fight back after fraud. Our Investigation Reports and Action Plans give you everything you need to pursue recovery, and our informative guides help ensure you’re better protected going forward.
What Are Binary Options?
Binary options are a type of exotic financial instrument that have existed since 1974, originally introduced by the CBOE (Chicago Board Options Exchange) — one of the world’s largest derivatives markets. They became widely available to the public in 2008, after which many entities began replicating the original CBOE model.
In simple terms, a binary option is a straightforward yes-or-no bet on whether an option will expire “in the money.” Some unregulated brokers also allow bets on out-of-the-money outcomes. Modern binary options typically have expiration times ranging from a few minutes to one week, with the majority of platforms focusing on same-day expirations.
Common Binary Option Types
There are three primary binary call/put options:
- High/Low A bet on whether the price will close above or below a specific level. The simplest and most common binary option type.
- Touch/No-Touch A bet on whether the price will reach a defined level at least once before the option expires — regardless of where it closes. If it touches that level at any point, the condition is met.
- Boundary A bet that the price will remain within a defined range over a set period. For example, if you believe XYZ will stay between $1.00 and $2.00 — and it does — you win.
Key Points to Remember
- Binary options are an extremely volatile and largely unregulated market. Both the EU and UK have banned them in recent years.
- Very few regulated binary options brokers exist, significantly increasing the risk to your funds.
- If you’ve already fallen victim to binary options fraud, Traceyourassets can help you explore your recovery options. Always research any trading platform thoroughly and seek out independent user reviews before engaging.
- Never risk more than you can afford to lose.
Are Binary Options a Scam or Legitimate?
In the overwhelming majority of cases, they are a scam.
While binary options remain legal in the US, they have been banned in both the EU (2018) and the UK (2019). A significant driver behind the EU ban was the questionable conduct of CySEC (Cyprus Securities and Exchange Commission), which granted regulatory approval to a large number of unethical binary options brokers, effectively legitimising fraudulent operations.
Although the US maintains a stricter regulatory environment, making participation marginally safer from a compliance standpoint, it does not eliminate the inherently high-risk nature of binary options trading. Among professional investors and speculators, few markets are regarded with more scepticism than binary options.
Simply put, binary options are closer to gambling than to legitimate investment. They are a true zero-sum instrument, meaning for every winner, there is a loser, and should be approached with extreme caution, if at all.
Binary options robot scams
If you are a day trader or an aspiring day trader, familiar with some of the largest speculative and high-frequency trading markets in the world like forex or futures, you are probably familiar with the prevalence of robots (commonly known as ‘bots’). Binary options robots are often sold as a way to manage your account. This involves sharing your account information or an API to allow an individual or automated system to execute trades on your behalf. Binary option robot scams include many high-pressure sales tactics, false statements on the return on investment and success rates, along with graphics depicting a wealthy lifestyle as a result of using their system.
Binary options software scams
Software scams in the binary options space are common and fall right into the same realm as robots. Depending on the software used for binary options (most are often done via web browser), some software is touted as ‘advanced artificial intelligence (AI)’ or ‘machine learning software, leading you to believe that it is an extremely sophisticated algorithm that will generate substantial gains. Many software providers report high returns – the returns the software provider is making is from selling his/her software to others, not on the success of the software in the binary options market. As with robot scams, be wary of the sales tactics and false lifestyle imagery.
Binary options trading scams
The number of trading scams in the binary options space is substantial.
Because some of the largest regulatory agencies around the world have banned binary options, many former (and new) brokers have had to reestablish their businesses in nations where there is little to no real regulation. The broad bans of binary options have resulted in thousands of unregistered brokers all around the globe. Brokers within the binary options space have questionable to outright fraudulent data feeds. It’s not uncommon to see bids and ask fluctuate violently within the final micro-seconds resulting in significant losses, sometimes on both sides of the trade! You can avoid some of the trading scams by using only regulated brokers, although very few are legitimate.
Binary options signal scams
Signal scams are hands down the most prevalent form of financial fraud and scams in today’s markets. For the binary options market, signal scams involve an individual or company that offers to sell you trade ideas (signals) in exchange for a monthly fee. The signals are provided via text, email, or via their website. The most popular version of providing signals in most markets is through the chat platform Telegram. As with any financial instrument, it is best to avoid signal providers – they are only interested in making money from you as a subscriber.
Lost Money to a Binary Options Scam? Here's How an Investigation Can Help
Falling victim to a Binary Options scam is a deeply disheartening experience — but it doesn’t have to be the end of the road. A professional investigation can uncover the truth, identify those responsible, and open the door to reclaiming your losses.
With Traceyourassets’ Binary Options Investigation services, you gain access to expert investigators who know this landscape inside out. Our process culminates in a comprehensive Investigation Report outlining all findings and the clear next steps available to you. And if you need us beyond the report, we’re here — offering guidance and support as you work to reclaim what’s rightfully yours.
How to Avoid Binary Options Trading Scams
- Use only regulated brokers. In the US, Binary Options fall under the jurisdiction of the CFTC (Commodity Futures Trading Commission) and the SEC (Securities and Exchange Commission). Legitimate brokers will openly display their licence number and reference their national regulatory body.
- Do your due diligence. Read user reviews across multiple independent sources. Be cautious of sites dedicated solely to reviewing binary options brokers — these are often shell sites designed to funnel you toward specific brokers.
- Check where the broker is based. If a broker is unregulated, knowing the country in which they are headquartered is an important piece of context.
- Test the broker’s data yourself. Before risking any capital, verify that data feeds are authentic and watch for any abnormal price movements near expiry — a common red flag.
Binary Options Scam Frequently Asked Questions
Are Binary Options legal in the US?
Yes. Binary options are legal in the United States and are regulated by two overlapping agencies — the CFTC (Commodity Futures Trading Commission) and the SEC (Securities and Exchange Commission).
How do binary options robots work?
Binary options robots typically operate in one of two ways — either through a standalone piece of executable software, or by requiring you to share your account credentials, allowing the robot to trade directly on your behalf. Both carry significant risk and should be approached with caution.
What is binary options trade copying?
Trade copying is a service similar to robots and signals. It works by linking your brokerage account to a “master” account, which then automatically executes trades on your behalf without any manual input required.
I was scammed by a binary options broker. What can I do?
You’re not out of options. TraceYourAssets can investigate your case and provide you with a comprehensive Investigation Report and personalised Action Plan — giving you the tools and clarity needed to pursue recovery and work towards getting your money back.