In the following article we explain what Binary Option get-rich-quick scams are, how they work and why you should avoid them.
A Binary Options get-rich-quick scam is a scheme were a reader is promised unrealistic profits or wealth using a “system” that turns out to be signing up for a Binary Options broker account. The get-rich-quick scam may or may not initially make it clear that the scheme involves using investing with Binary Options, but it will claim to have a system, piece of software or secret for “beating” the Binary Options trading platform.
Such scams will typically employ a number of deceptive tactics that are common in the get-rich-quick industry. This can include the use of freelance actors to create fake “rags to riches” video pitches, the implication that there are only a limited number of spots available and the claim that by signing up for the scheme you can passively become rich in a short period of time.
When participants sign up, they are eventually instructed to sign up for the Binary Options broker account and invest a certain amount of money into that account. The participant is told that they will be able to get rich by using some “system” or “automated software” that can “beat the Binary Options trading system” resulting in instant financial wealth.
What are Binary Options?
Binary options is a form of trading that allows investors to predict whether a specific stock will rise or fall in a short period of time. If the investor predicts correctly they get a return on their investment. They the investor predicts incorrectly, they lose their investment.
Binary options are extremely hard to predict since stocks constantly fluctuate in price all of the time, and consequently predicting whether a price will be higher or lower in a small space of time is inherently difficult. Even if a stock rises over a period of hours or days, there is no guarantee that it will be at a higher value over the small period of time that Binary Options typically deal with.
While there are legitimate and regulated Binary Option platforms that you can trade on, there are a number of unregulated brokers online. This in turn has made this form of trading popular with get-rich-quick scams who falsely promote it as an easy to way to get rich.
However there are no systems or secrets to making money with Binary Options. It is a form of trading and is just – if not more – volatile than more traditional investment platforms, where even experienced traders can lose out. Most spectators draw a clear parallel between Binary Options trading and gambling.
How does the scam work?
Depending on which variant of this scam you encounter, these scams can work in one of the below ways –
1. Scammers who operate get-rich-quick scams using Binary Options will attempt to lure victims to various Binary Options brokers who they are affiliated with, doing so by using unrealistic sales pitches that we discussed above. In turn, when the victim invest money and use the trading platform, the scammers behind the get-rich-quick scams receive a commission for referring customers to the platform. In these cases, the scammers may claim to have a “secret system” or software that can make the visitor rich by trading in Binary Options, but this is just a trick to lure visitors into using the site. Often these systems of software will just use well established casino gambling systems like the “Martingale” system (double a bet/investment after each loss.)
Given that there is no way to beat the system and the victim will have little or no investment experience, it is likely the victim will eventually lose their investment.
2. Scammers who operate get-rich-quick scams using Binary Options may lure the visitor to an unregulated Binary Options broker, or to a platform that pretends to trade in Binary Options. The victim is instructed to download software which they are told can “beat the system” by making correct investments. However the software is actually designed to do the opposite and the victim loses their investment which can often go straight to the scammer.
The bottom line
Any website or offer you see on the Internet that claims you can get rich using some sort of passive system is likely to be lying to you, and this is especially true if that system turns out to be trading on a Binary Options platform.
If you see some kind of opportunity claiming you can get rich by using Binary Options, no matter how convincing the system may appear to be, it’s a scam.