Are binary options serious or a rip-off and scam?
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What are binary options?
[sc:BDSwissRBanner]Binary options are a relatively new type of financial instrument. Financial instrumentwhich is a harbours enormous profit potential. It is a Derivativethat the course of another Underlying depicts. An underlying asset could be an asset such as a share, a bond or a commodity. With the binary option the buyer can decide on a price that he believes the binary option will achieve. does not exceed or exceeds. If he is correct with his forecast, he is awarded the contract by the Broker. The Yield can be used for this type of option in the range from 80 to 200 per cent. The difference to a classic option is that the buyer does not receive a right to buy or sell an asset at a certain price when he acquires the option, but that he receives a Forecast via a Share price development provides, which is either positive or negative.
Why would you think it's a rip-off and a scam?
First of all, it is understandable that investors want the binary options are sceptical. It is in the nature of man to view everything with a certain degree of scepticismwhich is not known at first glance. However, this fact alone is not the reason why investors might think that binary options dubious are.
This asset class is a relatively new instrument, that puts the speculative trader in a new position. Instead of a Target pricea Loss limit and a Exit point his freedom of decision is limited. He decides merely for one course direction of the underlying asset instead of determining these three parameters. Either he is right with his forecast or he loses the capital invested.
[sc:bo_vg_banner] Binary options thus offer an enormous Loss potential, which can quickly lead to a total loss of the capital paid in. In the past, when binary options were still unknown, there were a large number of investors who took advantage of the opportunities offered by trading in binary options. binary Options have recognised for themselves. In addition, it was the providers' big profit promises that caused even more turmoil. As always with the Stock exchange trading However, an investor cannot participate in the market in the long Trade profitablyif he does not have extensive and well-founded expertise. The result was that a large number of interested investors have lost a lot of money in a very short time.
In addition, there have been a number of fraudsters in the past who have attempted to obtain clients' funds using fake trading robots. However, such providers do not usually receive a licence from a regulating authority, which is why this is the first selection criterion when choosing a trading robot. Brokers should apply.
The voices of the bruised or inexperienced investors have left an echo and led to binary options being portrayed in a bad light by the public. However, anyone who blames binary options per se or curses the entire market at this point, makes a crucial mistake. It is not the binary option that the Risk of fraud but rather the ignorance of the investor. Experienced investors can recognise fraudsters. Beginners will be able to do so by the end of this article, or will be able to recognise what is wrong with high probability recognises a reputable provider.
What is being done to combat attempted fraud?
First of all, it should be noted that Fraud attempts are comparatively rare. Those who have fallen victim to a scam usually become vociferous and spread furore on the internet accordingly against the corresponding provider. Investors can take advantage of this by carrying out research before making a deposit into an account. There are numerous websites on the Internet that deal with complaints against providers of binary options to deal with. Investors should also make sure that the broker in question is regulated by an authority.
Since most brokers for binary options are currently in Cyprus due to the favourable entry conditions, investors should Broker have a licence from CySEC, the Cypriot financial authority. 
This authority was only founded in 2004 and was the first tax authority wn 2012, the European Commission recognised the binary option as a financial instrument to be regulated. It is subject to EU legislation, as Cyprus itself is an EU member state. The aim of the EU it is in all member states a harmonised financial supervision to be implemented. The MiFID Directive was a first step in this direction, which was recognised and implemented by Cyprus. was realised.
CySEC implements its financial supervision through three core elements:
- The Deposit protection the broker
- The Supervision on the brokers with regard to compliance with the guidelines
- The Awarding and the Withdrawal of broker licences
Deposit protection ensures that brokers pay into a specific fund. The Deposit Protection Fund collects the funds of the participating brokers, who are generally obliged to do so by law. If a broker becomes insolvent, the fund can fall back on its deposits and cover the event of insolvency. The purpose of deposit protection is to Protection the Customer depositswhich are served first in this case.
By granting and withdrawing licences, the authority has created a Great leverage on the brokers. Most of them will be able to establish themselves in the market without harbouring fraudulent intentions. As trading on the market is characterised by the lack of alternatives Money market is flourishing, it is lucrative enough anyway.
Are binary options safe?
The question of the safety of binary Options is justified, Nevertheless, it can only be provided by a beginner. It is not right to ask about the security of an asset. No risk and no security can emanate from an asset alone. It is the correct application of the binary option that promises security. Due to the high Potential returns in the trade of binary options It must be clear that this is always associated with a high level of risk. It is up to the trader himself Risk-eliminating elements that make trading profitable. Security against fraud is guaranteed by the Broker given. The question should therefore rather be whether it is safe to deposit your money with a broker and trading with binary options. The answer here could be that it is not safe. What is certain, however, is that a retailer with the necessary experience and the corresponding Expertise can achieve enormous returns [sc:bo_testsieger_promobox].
Simone Aescher is the founder and operator of the successful crypto blog aescher-ai.ch.
After studying business administration at the Frankfurt School of Finance, she gained over 5 years of professional experience in the financial sector. However, her passion has always been the financial markets and investments.
In 2019, Simone Aescher finally turned her hobby into a career and founded her blog. She shares her in-depth knowledge of shares, ETFs, cryptocurrencies and much more.
As an active trader, Simone is constantly testing new brokers, robo advisors and trading apps. With her honest product reviews, she helps her readers to separate the wheat from the chaff.
With her academic background, many years of experience and practical expertise as an investor, Simone Aescher combines the ideal prerequisites for competently analysing and evaluating the financial markets.