A unique form of investment option, binary options have recently come under scrutiny by the Financial Industry Regulatory Authority FINRA for potential increased risk of fraud. The potential for fraud does not mean binary options are unsuitable for everyone, but investors should be aware of all their advantages and disadvantages. Developing an understanding of all investment opportunities prior to investing can minimize the risk of fraud and help investors make fully informed decisions.

Binary options are so-called because upon the expiry of a specified period of time, the option either makes a pre-determined amount of money or nothing at all meaning the investment is lost.

They provide investment access to stocks, indices, commodities, and foreign exchange. This is true regardless of how much the instrument actually moved. If the trader is incorrect on predicting the direction of the market, the investment is lost.

In order to make money, the price must be above the strike price at the time of the expiry of the option. One of the greatest advantages of binary options is that the risk and reward are known up front, before the purchase is made. This means that a trader can be correct on the market direction by a very small margin and still succeed on the investment.

Another advantage is purchasing binary options are very simple as they only involve one decision: will the underlying asset increase or decrease in value? The major disadvantage of binary options is that the trader must be correct a fairly high percentage of the time in order to make money.

This is because the rate of return is fixed. For example, a trader purchases an option thinking the underlying asset will increase in value, which it does. It does not matter how far above the strike price the underlying asset increased to in terms of the rate of return enjoyed by the trader.

This means that there is no possibility of one large successful option purchase offsetting a number of unsuccessful purchases that result in losses. If you would like more information about legal issues related to investments, contact an experienced securities law attorney today. At the Silver Law Group , we help investors pursue recovery from stockbrokers and other investment professionals who have committed misconduct.

Visit our Florida Securities Whistleblower Website. Please do not include any confidential or sensitive information in a contact form, text message, or voicemail. The contact form sends information by non-encrypted email, which is not secure.

Submitting a contact form, sending a text message, making a phone call, or leaving a voicemail does not create an attorney-client relationship. Free Consultation: Tap Here to Call Us. Silver Law Group Home. Contact Silver Law Group. Dedicated Forex Lawyers. We deal with:. Online Trading Forex Trading CFD Trading. Binary Options Crypto Currency Online Fraud. The main tools the fraudulent forex companies use to steal money are: Confusion Misinformation Rigged trading platforms.

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Unfortunately, binary options fraud victims have seemed to multiply rapidly in recent years. The reason for this is that many binary options firms have popped up both domestically and internationally with the objective of capitalizing on the lack of initial regulation on the binary options financial trading sector.

For consumers that do not have a strong awareness of the financial sector, may find themselves falling prey to this scam as it has odds for investment returns that are truly too good to be true. If you have been a victim of such a scheme, it is wise to speak up and recover your investment. It can be daunting to try to ascertain what you can potentially recover from a binary options claim. Some popular forms of recovery of capital that have been successful are listed below:.

Depending on the particularities of your case, you absolutely can get the results that you are seeking if you get the proper advice to assist you with your dispute process.

Silver Law Group represents the interests of investors who have been the victims of investment fraud. If you have questions about your legal rights, please contact Scott Silver of the Silver Law Group for a free consultation at ssilver silverlaw.

com or toll free at Free Consultation: Tap Here To Call Us. Securities Arbitration Lawyers Blog. What Potential Courses of Action Are Available It can be daunting to try to ascertain what you can potentially recover from a binary options claim.

Some popular forms of recovery of capital that have been successful are listed below: Attempt a Chargeback: It is possible to pay for your binary options through utilizing a credit card. For this reason, it is a wise strategy to contact your credit or debit card company about the circumstances with their fraud departments.

If you properly report the transaction, the credit card companies will attempt to do a chargeback if they approve your request. If it is not successful, there are still other legal options to consider for your claim. Litigation Against the Broker: Hiring a lawyer is one of your best strategic moves because they will be able to present to you a wide variety of options. This is something that will help you to get your desired result, which is your capital returned to you intact.

Reporting the Fraud to a Government Agency: What is important to understand about reporting to a governmental agency is that you may not necessarily see a great deal of return in the short term; however, it is important to understand that you will be contributing to the governmental agencies extended their protection to protect consumers in the future In terms of the United States, it is best to report binary option fraud to the CFTC.

For European traders, OLAF is the best agency to contact. Litigation Against Other Potential Parties: Can You Get the Desired Result?

These cookies will be stored in your browser only with your consent. Our fraud lawyers understand that binary option traders are not required to be regulated by the financial conduct authority. You may be worried about whether your family will have enough money to cover their food and bills. Name Required Email Required Phone Required. The major disadvantage of binary options is that the trader must be correct a fairly high percentage of the time in order to make money.

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