What are Binary Options?
Binary options are sort of a wager where investors bet on the performance of an underlying asset, often a currency, stock index, or share, usually in a short period of time—sometimes minutes or even seconds. When that period is up, the investor receives a predetermined payout or loses their wager.
No business or individual is registered or authorized to market or sell binary options in Canada.
What is a Binary Options Scam?
Binary options scams do not target one particular type of investor. In most cases, people find what seems like a great way to make money without stopping to consider if what they are investing in is fraudulent.
A large number of these scams begin online where fraudulent binary options websites purport to offer legitimate investments. The trading activity and investment returns investors see on these sites are not real.
How Do Binary Options Scams Work?
Binary options are usually advertised through websites and social media posts. Often the ads will say how easy and profitable it is to trade these products or point to how new binary options are in the investment industry.
Investors typically create an account, deposit money, and begin trading binary options in a matter of hours. All trades are rigged and investors soon find that they are unable to withdraw deposited money or any purported profits. The fraudsters running the scam eventually shut down the website and take all of the investors’ money. In some cases, credit card and banking information is stolen, which can result in even bigger losses for investors.
As is the case with most frauds, the chances of recovering lost funds are low.
Watch out for one or more of these common characteristics:
- Websites or mobile apps saying you can earn money quickly with binary options trading.
- Advertisements to engage in offshore options trades.
- Claims that the options are low-risk and provide high returns in a short time period.
- Marketing the so-called investments as offshore and tax-free.
- Free money and other incentives to open a new account.
- Pressure to register now and take advantage of an exclusive opportunity.