Pocket Option Strategy 2 Min

It’s perfectly normal for investors to test out new strategies Pocket Option Quotex . But be careful . There are seemingly “easy” or “low-cost” or “low-risk” offers popping up online that are actually frauds designed to drain money from investors’ accounts.

These frauds use a product known as binary options. The products are legal to trade in the United States, but the websites are not registered to sell to U.S. investors.

These websites commonly are operated in other countries with fake U.S . addresses Pocket Option Binary Options Trading School . They also regularly feature unreasonable claims of “wins” or big returns, phony testimonials, and fake social media comments.

There are only three designated contract markets (DCM) and one securities exchange legally offering binary options trading in the United States. The DCMs are Cantor Exchange LP; Chicago Mercantile Exchange, Inc.; and the North American Derivatives Exchange, Inc. All other entities offering binary options that are commodity options transactions are doing so illegally.

A binary option is a “yes/no” proposition based on the price of an underlying asset at a set time and date. If a customer guesses correctly at the time of expiry, the customer is paid (minus broker fees). Guess wrong and the position is lost.

If you are trading binary options, but not trading with one of the properly registered exchanges, then you may be involved with a fraud.

Why is registration important? Because when a binary options company is registered, you know it meets specific regulatory requirements for liquidity, safety, and customer protections that are enforced by the CFTC. And if something goes wrong, you may have some recourse through the CFTC’s reparations program or the U.S. courts.

Anyone can set up a trading website

Binary options fraudsters can come and go overnight because the tools to build these cyber-scams are robust and easy to come by. Anyone – including fraudsters – can build a website quickly, even after their other web properties have been shut down by authorities.

That’s why smart investors need to recognize the framework of binary options scams so they can avoid getting entangled in a fraud.

The temptation of a reasonable offer

Illicit binary options companies begin by luring savvy traders with a rational proposition, a low starter deposit – just a few hundred dollars to “try it out.” A customer can purchase the options 24 hours a day, seven days a week, and settle their trades quickly. Should advice be needed, these fraudulent companies offer electronic systems to automate trading decisions or personal “brokers” willing to offer their guidance. Unfortunately, many times the “brokers” are just glorified salespeople trying to convince you to spend more money and not registered brokers or advisors at all.

They’ll point to the profits customers are earning and suggest they would make even more or could get additional service, like insurance against losses, if they just increase their investments to keep the momentum going. Many times, though, the gains customers see aren’t real.

What’s really going on

Behind the scenes, gains are commonly faked and trades suggested by the automated system are random. The scheme only becomes apparent when customers try to withdraw their money. Suddenly, there are outlandish fees––up to 25 times the amount invested, or your personal broker disappears and the company refuses to honor any agreements you had with him or her.

Even worse, once you learn that it will cost more money to remove your initial deposit, sometimes they attempt to sell you a “double down,” where for a reduced fee you can “get it all back,” which unfortunately is just another lie.

For many caught in this trap, what started as seemingly innocuous online trading careened into losses that reached tens of thousands of dollars.

Beat fraudsters to the punch

Binary options fraud, and other types of investment fraud, can be avoided. Remember who you invest with is just as important as what you invest in. Is the company selling the investment legitimate? Is it properly registered with federal and state regulators? Is the broker registered?

Obtaining key information regarding your broker’s disciplinary history or current registration status can be easily found in the databases at cftc.gov. Simply run the name of the company and your broker. If they’re not in the databases, they aren’t registered with appropriate regulatory authorities to offer the sale of commodities or securities. Registration is not a guarantee against fraud, but it’s a great first step in safe guarding your funds.

This article was prepared by the Commodity Futures Trading Commission’s Office of Customer Education and Outreach. The article is provided for general informational purposes only and does not provide legal or investment advice to any individual or entity. Please consult with your own legal adviser before taking any action based on this information.