It’s the scam of the decade!
Binary options brokers are springing up everywhere on the internet, and the public is getting ripped off. With flashy sites and manic testimonials, they are enticing thousands into a speculative trading fad that you should avoid!
Here’s eight reasons NOT to trade binaries…
1. You don’t know who you are dealing with. Almost all websites refuse to tell us who they are, where they come from, who they bank with. Their infomercials make huge promises, but avoid risk statements, and refuse to reveal their identity. But they are often criminal enterprises and want all your personal information–passport number, social security numbers, credit cards, etc. Sure signs of a scam! So stay away from any company not based in USA and regulated by the CFTC. Call them at 888-366 2382 if you are not sure.
2. You’ve got a 50/50 chance of being wrong. In a binary play, you either win or lose. That’s it. You have no way to win more than you lose, and as many people are poor managers, they will probably lose more often than they win. These are bad odds, no better than tossing a coin.
3. The payout favors the broker. Binary options brokers offer 75% to 90% of the winning dollar. That means if you lose, you lose $100, but if you win you only get about $85. That’s uneven and unfair–and its a scam.
4. You can only buy and not sell options. In true options trading, the public can sell as well as buy, and smart traders know that the time value of premiums favors sellers over buyers. (That’s why at Honolulu Options Traders we teach how to sell with limited risk.) But in a binary world, the broker holds the cards. He can sell every play to two people, and only one can be right, so he almost always wins.
Let me explain. One kind of binary option offers you money if the stock goes above, say 66, or below, say 64. Let’s say you decide that the stock is going to move either way soon, and you buy the 66 and the 64. Stock moves to 67. You paid for two options, but the broker has to pay out on only one. There are variations on this, of course, but overall the broker can’t lose, because he will never have to pay out as much as he takes in. You’re the sucker!
5. The broker holds all the money. In a normal stock options account, you can select “margin” and get money transferred out of your account at any time. t’s a scam– ‘nuf said about that one.
6. Brokers are refusing to pay out money. Many people are complaining that they cannot get their money out from the binary broker when they want it. When the supposed broker is located on a Caribbean Island, Nigeria, Russia or Cyprus, what are you going to do? You can register your concern and alert other traders at Binary Option Watch Dog.
7. It’s unregulated. Its the Wild West all over again! Unlike the regular stock and options markets, binary brokers operate independently and without ethical or legal constraints. You can demand, threaten and even sue them if they rip you off, but good luck collecting from them. There there is no requirement for fairness, openness or disclosure of liability, human greed takes over.
8. You have to sit there for hours to make any money. Even if you have a foolproof system and can beat the “house” in binaries, you either need to buy expensive software, subscribe to a chaotic signal system, or suffer from eyestrain and backaches. One online broker claims that you have to follow his system “exactly, with no deviation…” So, its goodbye freedom!
These are all good reasons to avoid binary options until they are properly integrated into the regular market and the odds of winning are improved for traders. Of course, I expect some posters to tell me they’ve made it big with binaries, or that they have an online system that removes the need to wait for payout. Fair enough. I’ll listen and learn.
I’m willing to be wrong about binaries, but until these problems are addressed for regular traders, I’m sticking with selling regular stock options and making good money each month.
Graeme Sharrock
President / Honolulu Options Traders, LLC
Tiger Trading 
Comment on ‘DOGS OF THE DOW” is a strategy regarding the 30 Dow Jones Index. It is about 30 companies in a rated list….the top annual producers and the middle and the lower ones. The bottom five or six are the “Dogs” of the Dow……the last place companies….having the “shame” and “disgrace” of being there.
These stockholders raise questions and bring in demands for improvement to go higher on the list. So over a few years, many or most of the “dogs” do get better.
It is individual companies, not industry sectors.
Comment is based on the class discussion of last week, someone asked about the Dogs of the Dow. Comment is simply that…..an input and part of participation in the group.
The attending weekly sessions are important for me to sharpen my skills and increase my energies of stock market trading.
The “mind.set” of attitude are so….sooooo VERY important.
The H.O.T. trader needs to enhance one’s success (the self.directed trader) by eliminating the weak.side losses and gaining on the strong.side profits. Weak and Strong traits of the individual trader. When the home.based business trader does the trades, there is no.one overlooking the transactions. That’s all up to the individual x oneself. This is the “difficult” idea of correcting oneself…..by oneself. Self.Improvement is a key.
And…not only attitude….but “capacity” as some people just ain’t got it.
Stock Market action is a very significant difficult business venture. Many beginners get gobbled up by the market motion and by their own short.comings.
You can teach market motion but you “cannot” teach someone about their own “weakenss of failure” in the marketplace.
Stock Market principles, strategy and management…..can be taught.
Putting it all together……cannot.
The action and results are up to the “student” or the “trader” x oneself.
The implementation, the “pulling the trigger” and so forth = application.
Implementation Application Doing the success action = FINAL results………..
FINAL results………
80% success rate of transactions (the batting average as in baseball)
and……………..8% monthly Yield of account (score at the end of the game)
Mahalo…..Wendell
Comment…..quite a nice report on :binary” options. Very good information. I had no idea of what it was…..saw ads and stuff like that……various people were trading it…….Thanks for the quality message on “binary” options.
Comment…..my own trading…..I am doing very important self.directed trading analysis of my own habits that cause losses (and there are several dominant features). Too close to the strike…….not paying close attention to the basic moving market conditions and not making the right decisions of the observation of the basic marking conditions……not doing enough details from the “think or swim” platform (there are dozens and dozens of information, data and trade aids)(because of the probability class I am now looking at the OTM % and the implied volatility data very very carefully, and I am now carefully and respectfully doing analysis and decisions following the VIX…..there are VIXIONS of the S and P 500, a VIX for nasdaq 100, a VIX for Russell 2000…..and there are VIXIONS for Apple, Google, Amazon, IBM and Goldman Sachs. There are many more…..VIX is a huge topic…..very huge. I am climbing out a recent series of losses of September and October. Since Novermber 2013….month x month….I had good months of 23 percent and 35 percent (two of the best) but there were huge losses….monthly loss of 25 % of my bankroll…just as well…and some months of growth were only a few 2 or 3 percent….overall for 11 months are losses.
Comment: Since February 2014 – I joined your H.O.T. meetings, and the awareness and education are very good. Now is a matter of fine tuning what I have. The group meetings and participation with others are heart-warming because of your approach to sharing and caring of others……especially with a “HAWAIIAN” theme………Island Sunshine, Tropical Ocean, Aloha Ohana style……certain “relaxed friendly lifestyles” (not so hostile) and all in the making for success in the abundance of the mighty stock market.