October 27, 2015 at 10:08 pm
This is actually a sad topic thinking back when the binary options industry kicked off early in 2008. Things have taken such a turn for the worse, especially when it comes to the security and safety of your hard earned money, being deposited with one of many available brokers competing for your business. If you have been around for a while it comes to no surprise that there are literally 100s of Binary Options Brokers out there – and counting. Even if this is the first time coming across binary options you would be doing yourself a massive favor by reading this article, as it touches on a sensitive, yet essential topic and debate in the industry. Get your thinking caps on and prepare yourself for a straight to the point, no nonsense reality, not only based on my own experience but countless clients feedback and concerns over the years.
A good and valid question you should always ask. They is to always question everything and everyone, no matter who they say they are or claim to be. This is the internet after all folks. Don’t be fooled or mislead, as this mostly happens on a subconscious level due to excellent marketing and hype creation by brokers. They tell you what you want to hear. DANGEROUS yet a fact in such a highly competitive and lucrative industry we know as “Binary Options”. So why listen to what I have to say? I am not working for a broker, nor am I going to recommend any broker during this article. This will give a neutral honest approach as I have nothing to gain by feeding you a bunch of “half-truths or whole lies”. As the idiom says: “Half the truth is often a whole lie”. Fair enough? Let’s get back to the whole purpose of this article.
There is no definite answer to this question and that is the honest truth. No matter who the broker is or what they claim to do to keep your funds safe and secure. You need to understand that there is always a risk involved. A perfect example one can use for a much bigger industry – Forex. A few months ago FXCM, one of the leading, if not the biggest Forex broker took a knock due to aggressive market activity and had to be bailed out or declare bankruptcy. We are not speaking about Millions rather Billions of dollars. So if a much bigger industry almost went down and hit rock bottom, the same can happen for a much smaller industry, which is pennies compared to The Spot Forex Market.
Your broker of choice should be regulated by a Regulatory Authority (CySEC, ASIC, IFSC, NZX, FSB, FSA UK, CFTC etc.) preferably in your country of origin. This does not mean 100% safety, but it does give a sense of security knowing funds are kept in segregated accounts etc. This also means they are monitored and have strict guidelines to follow. In my professional opinion, some of the above mentioned regulatory entities are not worth the paper they are written on. Not going to mention names as II promised I’d stay neutral. You should always find out up to what amount your funds are insured for! Simply keep your account balance within that range at all times rather than leaving ridiculous amounts of money in your account. Only keep the absolute bare minimum needed. Rather re-deposit if needed. You can still base your money management plan based on the amount you decided and feel comfortable with to invest/risk, even though if it is not deposited into your broker account. This is something a lot of Forex investors have been implementing.
If you really want to put it all on the line (Might be the only broker accepting your country or just plain lack of due-diligence), or maybe you got locked into an attractive offer you simply could not miss out on due to marketing and hype techniques… and end up depositing with a newly established NON REGULATED broker you are screwed! Period. Avoid this scenario at all cost! Taking this advice will save you a ton of headaches in the future – Trust me on this one as I have been there myself.
I think the hard facts speaks for itself. The truth may not be what you want to hear or believe, but at some point you will get screwed over if you are not careful. Here is a perfect example to back up my facts. Ioption.com is a perfect example of a leading broker during the early to mid-stages when binary options hit the market that CLOSED DOWN a few years ago. Were they regulated? No! Did all the clients get their money back? Hell no! Do yourself a favor and read – The provision of all financial services has been terminated. Be safe and look after your hard earned money!
November 3, 2015 at 2:10 pm
This article was definitely worth the read. It just reminded me to be extra careful when dealing with brokers and other services. I wish we could live in a perfect world, but unfortunately there is no such thing. There will always be situations where we will find ourselves where we don’t want to be. We just need to learn how to deal with it. Thanks for reminding us to look over our shoulder
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