Binary Options Regulated and Scam Brokers

Roaming

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This thread is meant to discuss everything related to binary options, its regulated and scam brokers. Any contribution from BO traders will be helpful.

First, will just copy my and Pharaoh few posts found on other thread that are related to BO and our conversation, because its all basic valuable info.

Me:

"""Why Pharaoh don't trust Binary Options Brokers?

When I was introduced to this kind of new market trading, felt the same, seeing how many brokers work like Casinos and most look similar even in its names.
Suspicious to find that most don't offer demo trading until depositing. Don't invest before testing your skills on demo. Can deposit the minimum amount and trade demo until you feel good for live trading.
Doing more research for the best binary options brokers out there, from the many i tested, found only three that can somehow be trusted for your money.
Using the ScamAdviser website, topoption.com, cherrytrade.com, and gtoptions.com got High Trust Rating.
Scamadviser don't guarantee that clients will be able to withdraw money or any business trust will be built, but at least it is a good starting forward step to minimize the scam from the good binary options brokers.
Topoption being the most regulated by many European regulatory bodies.
I never judge anything for general, there are always good and bad companies, the latter may be more than the first esp. in a new business like the binary, but our job is to pick the good ones. There are hundreds or thousands of forex brokers out there, some are regulated and scam, some are not regulated and not scam. Out of lets say 1000 forex brokers on the forexpeacearmy scam radar, might find 500 scams, 250 regulated that its clients have different problems with them and there's open file in FPA court, but there are 250 good forex brokers left to choose from.
A person with no forex background and experience will fail in binary options because it's related to it in a way or another.
Same market indicators, economical news, money management etc can be used. Can open forex broker mt4 and trade binary options relying on your mt4 charts.
There are many scalpers who trade forex, the 60 seconds method in binary options is not far from their understanding. The same for the 5, 15, 30, 60 minutes, different traders trade forex according to these time frames charts, same apply for stocks, indices, commodities.
Although, there are some differences like not able to control the position after open until elapsing time, but there's an option of reducing the loss with the sell option.
Frankly, traders who use the 5, 15 and 30 minutes charts for mt4 trading, how many times they change their take profit and stop loss in that short time?
When can't resist but modify the position in a short time frame , why trade it?, trade higher time frames.
Binaryoptions can be a little easier despite of it being for 80 to 90% return but the investor can win that as little as a 0.1 pip difference than market price that will win a very small amount in mt4 trading. The same money management can be applied. When having a 1K balance, instead of opening position of $100, can open a one of $10, some offer as little as $1 for minimum position size.
Even if the best binary options regulated broker turns to be a scam and the whole binary option trading as fake according to how Pharaoh think depending on his replies, investors can protect themselves by starting small with 100 to 500 dollars(can start with $25 or lower), test the broker, its system and withdraw money that can be easy because most don't charge any fees on both withdrawals and deposits.
Example: After depositing $100 and making $100 profits withdraw it and continue trading with the $100, same for $500, $1K etc
Nobody can cheat you and steal your money, even the thief when you take safe measures.
When they scam any client with $100 or $500, come to forexpeacearmy and reveal the company's name, let all know about them to prevent dealing with.
The advertisement on forexpeacearmy worth more than the small amount they cheated, plus you'll be benefiting thousands of investors""""
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ME: """"""""I did not name Nadex first because it's out of question, well regulated, can't play around with clients money. Second, searched out the states for regulated brokers that can accept both US and European Citizens, not to forget others too.

Anyone can find some Binary Options Pros. I'll discuss its brokers cheats and cons:

- Don't join a broker that encourage you of opening an account for large amount of money saying it will make you more money.

- Don't join a broker that insist on you opening short time frames positions because it will make you more money, saying large time frames will loose you time.

- Don't join a non regulated broker.

- Don't be surprised seeing at least 1 pip difference between the lowest spread forex broker platform and the best regulated binary option broker platform. Its price equation Bid+Ask/2

- Don't be surprised when you see the price shown at the option expiry time differs from the price seen afterwards in your account expired position.

- An excuse will be prices are running fast, chart price may vary from expiry price! etc

- Don't believe your broker that say "We are with you against the market"

- Don't be surprised to hear your broker tell you "JUST TRADE WHAT YOU SEE ON OUR PLATFORM CHART, all our clients do the same, don't advice you trade according to your broker mt4 /mt5 charts".
They are telling you to take trading decisions according to an empty chart that only shows a graph and line going up and down!! Guess what type of clients they have? GAMBLERS

- Don't make the mistake of trading short time frames in low volume market. The 1 pip difference will kill your money. trade it in high volatility market

- Don't trade the 60 seconds option, it's of no use other than loosing money. Except in one case, "sometimes" may win you money in news trading if lucky to call or put at good price before the spike occurs.

- Accept seeing weak prices updates for whatever reason, it's suspicious, how come the elapsing time working normally, the prices not!!

- They don't like to have many experienced forex traders, but many GAMBLERS just looking on their empty chart. They profit from the difference between winners and losers positions. Imagine many Winners and less losers ? They will find themselves in liquidity problem sooner than later.


I think binary options brokers get their profits from manipulating prices esp. when the difference bt. your entry price and expiry rate is tight, they can freeze the platform or change the price even after the option expiry date, to find another expiry price in your expired/closed positions.
They are trading with the market against you, even if they swear million times telling you the opposite.

I believe a binary option trader can beat the broker by trading higher time frames, predicting a put price and the candle goes down from there or midway until day or week end. Can beat the broker in shorter time frames when putting on a high price at the last elapsing 5 minutes of a 15 minute expiry where the market will reverse for over 7 pip and same basic for any other time frame when the difference bt. entry price and expiry price is wide(more than 5 pip), it will need a very sassy scam broker to close that gap, i doubt a regulated broker will go that far in shameless action! """""""""""


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Pharaoh reply:

Why don't I trust binary brokers?

Consider the fact that there doesn't truly seem to be any possibility of a true Liquidity Provider for binary options. This inevitably makes binary brokers into bucket shops, just like online casinos. Client losses are gains to the broker. Client gains are losses to the broker.

Then there are the numerous complaints right here at the FPA of:

1. Expert employees promising huge profits and then quickly trading client accounts into massive losses. After all, what casino or bucketshop broker would have someone providing a sure way for clients to make massive profits? Doing this would quickly bankrupt the company.

2. Inability to withdraw profits or even initial deposits from many binary brokers. Those client wins aren't really losses to a binary bucketshop if the money can never get withdrawn.


And let's not forget what the CFTC and SEC had to day about the whole concept:

CFTC and SEC issued a joint Fraud Advisory Alert about Binary Options

Wow! In addition to everything else, some binary brokers use the AML required documents for identity theft. There are some very versatile criminals in the binary options industry.


Do I think it's possible for there to be an honest binary broker? Yes. Just as it's possible for there to be an honest online casino. From what I've seen so far, my opinion is that honest binary brokers are incredibly rare. Until some really good ones emerge and prove themselves to remain honest and well regulated over time, my best advice is to think of binary options brokers the same way you would think of a case of bubonic plague - something to be avoided at all costs.
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My reply: All what you wrote can be applied to scam forex brokers or any illegal company working out there.
If there's only the Nadex in the US and another regulated broker in Europe that are running the binary options business with transparency, no scam or cheats, that's enough for me not to judge like you had done that the whole binary options idea is scam.
Why don't you present some regulated good brokers for binary options traders who are reading FPA? instead of calling it fraud.
I would not judge a son for his father criminal record!
The binary options idea is not bad, may forex traders who are failing in forex may succeed in binary options with the right broker.
I wrote more cons about binary options scam brokers tricks than what you had done but that doesn't lead me to put a scam flag on the whole binary options industry.
I gave an easy example on what to do when investing in a new project. Search for regulated binary options broker, pick the one with the best service, open a demo account with, after trying your forex system on it, go live depositing the minimum amount required. Trade, make some profits, withdraw your deposit, trade with your profits as long as you wish, with some of it or deposit more money depending on the broker good service and support .

I always like taking the challenge which does not mean throwing yourself or money in fire to learn from. There are always risks in any investment, if wanna fear any new project, we will stay in our place forever!

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Pharaoh replied:

Let's me think about this . . . .

There are quite a few well regulated forex brokers. The NFA, CFTC, FSA, and Swiss (lost track of the name of their regulator) have been slapping down a lot of fines and requiring tons of paperwork to improve them.

In the USA, there's 1 well regulated binary options broker. You mention that there's 1 well regulated binary broker in Europe.

If you want to name the other well regulated broker, that's fine. It still doesn't change the fact that all binary broker are bucketshops and that, with the possible exception of 2, none are truly transparent and well regulated.

Two out of hundreds (thousands?) in binaries vs. a hundred or so out of a few thousand in forex. Picking a forex broker is dangerous enough, but the odds with binaries are far, far worse.

I did say that honest ones could emerge over time, but right now, picking one at random is fiscal suicide.

I can also say that in the long run, even "honest" binary brokers will find ways to deal with traders who are too profitable. Bucket shops can't handle traders who are too successful any more than casinos can. Go to Vegas and get on too good of a winning streak for too long and you'll find yourself being politely invited to change to another casino. This shouldn't be a problem in forex if you trade with an honest broker on a real ECN account.

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Roaming

Banned for uncivilized conduct
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142
Lets continue the argument Pharaoh:D

Binary Options regulated broker in the US is Nadex.
There are 3 BO brokers(bucketshops probably!) that accept US clients: Cherrytrade.com(couldn't get an answer for regulatory!), redwoodoptions.com(replied by "Redwood is currently not regulated, however we expect to be in the process within the coming months"), and bosscapital.com(replied by "We are currently in the process of pursuing regulation in the European Union as well as other jurisdictions")
I think the last two are from the same family or owner;) Be Aware! Americans!

For abroad, in Europe and worldwide, there are regulated brokers:

IG.com is definitely one of the most shining regulated by the FCA (UK)

Topoption.com regulated by many regulatory bodies in Europe(CySec, FCA, BaFin, AFM..etc)

OptionTrade(related to hotforex broker) regulated by the CySec

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Couldn't find any other brokers that are well regulated in or outside the US. If someone have further info, provide it to us.

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Have some questions for Pharaoh: any idea of IBFA - International Binary Financial Auditors ?, some brokers claim that its a reliable source for their clients!!
Any idea of International Financial Services Commission ("IFSC") ?, can it be of any good for clients that have accounts with brokers under its regulation!!?

Any idea of Leverate company ? A kind of liquidity provider for BO brokers getting its data feed from.

By the way, the Swiss Regulatory Body you asked for is FINMA

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I have no doubt that all BO brokers have no interest whatsoever in an always winning trader.
It's against the BO brokers system concept.
BO brokers who have no spread and no commission, that say they only profit from the 20-30% difference in client investment are not honest. They manipulate the prices for some 2-3 pip difference than your the lowest forex broker price and this action is not permanent but from time to time which raises the issue of it being to effect clients positions and benefit the broker.

Can you gain money from BO brokers that are regulated despite all the difficulties that they may create for you? Definetly a big YES but you must firstly be a Real Good Trader with a lot of experience from your forex trading to understanding the binary options system especially when trading lower timeframes, you might loose a position that can turn to be great for 100pip after some hours but that means nothing in BO Trading if choosing lower timeframes. Must also set a very good entry point to gain even if price stays up or down for sometime during the short expiry time period, or the best trade higher time frames of you can not develop that high sensitivity between your preferred entry point and the expiry period running on.
 

Pharaoh

Colonel
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19,908
I'll yield the point on Nadex. The CFTC and SEC have made a BIG point of warning people off from unregulated brokers and also pointed out that Nadex is regulated. Obviously, Nadex knows how badly the CFTC and SEC would take it if they had to later accuse Nadex of breaking any rules.

Regarding any broker (forex or binary) claiming Cysec and FCA. The vast bulk of those are ONLY registered with Cysec. The FCA just gives them a free pass based on Cysec and refers all complaints to Cysec. This means there is no UK FOS protection provided, unlike brokers that directly register with (and ware regulated by) the FCA.

Cysec and Binaries? Let's see. Cysec had to issue a reminder to companies about not locking up trader money based on minimum turnovers. Did the complaints about thise sort of thing happening at Cysec regulated brokers stop? No, at best, they slowed down a little.

Banc de Binary is Cysec regulated, but keeps getting more attention from the CFTC.

Have you ever heard of Cysec ordering funds be returned to clients of any broker? I haven't.

If IG's binary division is truly directly under FCA (and thus FOS), that would be safer than a Cysec regulated broker.

Based on having the win/loss payouts stacked so badly against clients, I'm personally in no hurry to test Nadex or IG.

International Financial Services Commission is Belize. The maximum penalty I've seen the IFSC impose is to throw a broker out after there were too many complaints.


Leverate is an LP for forex brokers. It is possible that some binary brokers may get price data from them.

Assume a $100 binary bet. I don't see how it's physically or financially possible for any LP to offer to pay $60-85 based on price moving at least 1 pip in a direction favorable to a client's position or to collect $100 based a move anywhere from 1 to hundreds of pips against a client's position at a specific expiration time. If the net positions of all clients aren't even, a large price move against the net position would cost the LP a fortune.

If and when more binary brokers get well regulated enough that competition between reliable brokers heats up, then perhaps the risk/reward ratios will improve. Until then, I'll stick to setting my own RR with SL and TP numbers in my forex account.
 

Joa

Private, 1st Class
Messages
157
Pharao is right about the regulations when it comes to the FCA.
The FCA does NOT regulate brokers who registered with the CySec and does indeed only refer to the CySec when push comes to shove.
Does the CySec order a broker to pay? no they don't. Here is a quote from CySec's letter to me:
The CySEC although it has powers to take measures (which include monetary sanctions) it has no powers to order the payment of compensation/restitution of damages suffered.

The FCA does regulate - but only brokers who did register with them AND who are having their corporate address in the UK.

Now there is another issue that nobody seems to know about: the vast majority of Forex brokers run clients transactions via their B-Book and that means, that no orders by clients ever reach the markets. In fact your broker is your counter party. I've had tough discussions about that with reputed brokers before - and I know I am right about that. Go check just for once what happens on Currenex. Ever seen prices quoted below 500k? Most likely not. Where do you think your tiny positions below these amounts end up? In the markets? Brokers know perfectly well that 90% of retail clients are loosing money. The forex market is as rigged as any other. You're up against the deep pockets of Hedge Funds who create market moves that have nothing to do with reality. Spikes and dips of 100, 500 points within minutes and often seconds have indeed no basis that would be dictated by true market demand. There is a reason why now all the regulatory bodies are looking into such things. You stand no chance against those firms running their algo's, their stop hunting methods - unless you trade on longer time frames - and then you might as well apply that for your Binary Options, too.

I tested many theories and put money down for it: I ran a robot that executed orders on each and every tick or price change. Dozens and hundreds of orders in series. I warned the broker beforehand that there would be massive amounts of tiny positions and they would not be able to handle their risk on the B-Book, each being 10k. They laughed and said they could easily handle that. yeah right, all BS.... Within hours I had thousands of positions - and got frantic calls right then... They could NOT handle it. Know why? Exactly, all my orders were placed on B-Book and their risk went through the roof, their server couldn't keep up. They simply didn't expect that and weren't able to handle their risk any longer. It was me laughing at that time - and then came the confession of one of the technicians: Your orders were just confirmed - that's how we do it. Oh really? Confirmed only... meaning, not one was placed in the market.

So with all due respect: Most FX brokers are a form of bucket shop too, telling you one thing of being an ECN - while in fact they are not. They all pool clients positions and run it against their hedge positions - and by placing massive amounts of orders, you run them against the wall.
 

Pharaoh

Colonel
Messages
19,908
Good point. In some cases, I do believe there really may be an LP for small orders, but the LP itself is just matching and hedging the next level up.

If you do this again, please make a video and also record what the claimed ECN broker says when they call and ask you to stop. :D

However, for orders that are either directly passed to an LP, or aggregated and hedged against via an LP, it doesn't matter if the market moves 1 pip or 1000 pips. If the forex broker is reliable, the profits transfer back from the LP and the traders will all be paid.

Since binary brokers don't have the ability to hedge their bets, a lopsided up vs. down vote from clients that wins will put the binary bucketshop into a fiscally untenable position.
 

Roaming

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Yeah Good Point, but most of the post info does not belong to this thread that discusses binary options only.

It might look right that taking 70-85% on your investment is a low amount but knowing that forex brokers take the same if not more from the spread and commission may change your thoughts.
Knowing that an investors can win by just 0.1 pip from the entry price and take the 70-85% compared to earning nothing worth for same pip in forex. There are many ways to implement SL and TP in BO Trading like the postpone of expiry date for once and the sell option, plus even doubling your investment for a better price entry.
Binary options idea is not bad, despite many scam brokers are ruining it and the regulated ones are very few now.
For the mean time, US investors can stick with the Nadex for CFTC regulation and the other names I mentioned above for others, this will payoff them time and their money will be safe if with a regulated CFTC, FCA, CySec, BaFin or any good regulatory body.
 

Pharaoh

Colonel
Messages
19,908
If you are the type who wants to aim for small scalping wins, then forex spreads and commissions can be about as bad (or even worse) as the stacked odds in binaries.

If you set your sides for 20 pips or more on the majors and avoid highly volatile times to enter and exit, the ratio for forex gets better. Add in the ability to adjust the win/lose ratio via SL and TP, and it's even better than that.

I won't warn people away from Nadex. They are registered. Since they are the only one of their kind in the US, they are probably under closer watch than the typical US forex firm.

Cysec is useless for protecting traders. They can find a broker or even through them out, but they don't order returns of money. Check the complaints against Banc de Binary before having any confidence in Cysec's ability to respond to issues in a timely fashion. The CFTC and SEC will probably finish with BDB before Cysec even gets started.

If there are any binary brokers directly registered with the FCA (and therefor are under the FOS), placing money there might not be as bad as flushing it down the toilet. I still wouldn't recommend it until seeing how the FOS handles at least one binary options dispute.
 

Roaming

Banned for uncivilized conduct
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142
You got my point wrongly. I gave the 0.1 pip just as an example of how there are advantages in binary options than in forex.
It doesn't have to do with you being a scalper or higher time frames when comparing BO to forex. Having a position depending on the 4 hour chart in forex and a stop loss of 20 pips may lead to your stop loss being filled but in BO expiry time might end your position in a win just for 1 or few pips.

Lets be clear about your thoughts about BO Pharaoh. You don't trust or believe in the BO Trading idea or you are just against it because of very few regulated BO brokers?
 

GOR FX

Sergeant
Messages
183
A few facts guys:

1. 99% of the non paid withdrawals here at FPA are from a BO broker

2. Only a handful of these broker's are regulated

3. 99% of BO 'traders- (read gamblers) will overlook the regulated brokers and choose one of the bucket shops

4. Forex Broker's make their money from spread's and commissions- how do BO brokers make their money? Good luck!
 

Pharaoh

Colonel
Messages
19,908
What I see the majority of binary brokers doing is taking a "trading" model that's more gambling than trading, stacking the returns so high in the house's favor that any self-respecting casino owner would blush at the thought, and then stealing scam methods from the worst forex brokers out there.

Those scam methods include:

Get the credit card number from a small deposit and then make unauthorized charges.

Find any and every excuse to not process withdrawals - including ignoring Cysec's clear reminder than a traders capital cannot be legally locked up by bonus terms for any Cysec regulated broker (binary or forex).

Offering to have an "expert" trade the account. Funny how the expert always ends up needing the client to deposit more money. Of course, this isn't so strange considering that 100% of that so-called expert's salary (as well as ALL other expenses of a binary broker) is paid for solely by client deposits.


Binary options IS gambling. With a vanishingly small number of exceptions, it's gambling in a casino that follows no regulations and faces no consequences for cheating or even directly stealing money from clients.

If and when more honest and well regulated binary brokers appear, I may revise my opinion. Until then, playing roulette in Las Vegas is more fun, has much better odds, and the house always pays winnings.

Plus, just for me, Las Vegas has a casino inside a giant pyramid. ;)
 
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