My Experience With Binary Options
I tried it out, a couple of years ago. Binary options are advertised as an investment method, but as soon as you start to look into it, you quickly realize: Binary options is just gambling!
I didn’t lose much money with it, but it didn’t take me long to understand, that it’s not a good investment method — only the broker makes money with it in the long run.
What are binary options?
You can invest in “regular” assets like stocks, foreign currencies, commodities, and index funds. But instead of actually buying these, you can also buy options. Options is a nice word that sounds flashy and smart but is basically nothing else but a betting slip.
Let us assume, that you want to buy a binary option for gold. If you do, you don’t buy gold, you place a bet on the gold stock price and get a betting slip in return. You can place your bet on a rising or falling price and set a specific timeframe for your price prediction — most brokers offer months, weeks, days, hours, minutes, and sometimes even seconds as a timeframe.
To give you an example: You can bet on a rising price within the next 60 seconds. If the gold price has risen after a minute, you’ll get paid (depending on the broker between 50 and 80 percent of wager). If the gold price falls, your wager is gone. If the price stays the same, you’ll only get the wager back.
A bet on a rising price is called a “Call”, while a bet on a falling price is called a “Put” option.
Binary options are not an investment
Don’t get fooled by all the stock exchange jargon and the professional sounding terms. Binary options has nothing to do with investing in stocks or valuable assets based on investigating the true value of the company or asset behind it. It’s just like betting on a race horse or the next NBA champion.
There are shady marketing people working in the background trying to sell binary options as more than just gambling. They tell us about investment strategies, technical analysis, and fool proof markers and indicators: Just analyse the stock price enough and you can win guaranteed with any bet that you place.
The brokers even offer you in-depth training and instructions on how to use the strategies when you sign up.
But don’t get fooled, it is all a scam!
Why binary options are a scam
Just like a casino, the broker will give you a gamble with rates that ultimately only favor the casino. Roulette is set-up against you. Statistically, the casino is the only one that is winning. Same goes for binary option broker.
Why are the brokers offering in-depth training on strategies? They do it for the same reason that online casinos offer free training on roulette strategies.
They want you to swallow the bait and place your bets thinking that you could beat the system. But you can’t. The rates are calculated in such a way that you must lose more than you win the long run. Remember: It is just like playing in a casino.
Does software help, making money with binary options?
No. The ones that are offering the software would not give the software away if it was legit. If they had a legit algorithm that makes them guaranteed money and give it away to people, too much people would make money with binary options for the brokers to survive. All brokers would go bankrupt if the trading bots would work.
Autotrader for binary options have been created to make people like you and me sign-up with a broker. The developers behind the software get an affiliate fee for sending new customers the broker’s way, which is their real source of income. The software itself is most often just a trash algorithm re-hashed from dozens of others that came before it. Many times, the developers behind a new software have pulled their marketing stunt hundreds of times before.
Besides the brokers and the developers, no one makes money with bots and autotraders.
Why are people claiming that binary options made them rich?
They do it because of the affiliate system. They want you to use their link to sign up with a specific broker, as that gets them paid by the broker. Many times, people claiming to make money with binary options are actually paid actors by the brokers directly.
Don’t be fooled by these clowns.