Avoiding Scams in Options Trading

Binary Blog Post

Many potential options traders enter the field of trading with a number of questions, but one of the most prevalent in our experience concerns whether binary options trading is a scam. Clearly, on a certain level, this cannot possibly be the case as traders can invest in assets and, if their decisions are correct, will receive the stated returns. Fundamentally, options trading is not a scam as the stated functionality is tried, tested and effective.

Of course, the fundamentals of a trading method can be sound, but there is involvement from a number of parties whenever a trading account is opened. There is the brokerage itself, which may well be regulated by a third party and makes use of another third party for banking and payment processing. The vast majority of these brokerages also adopt white label software to enable trades to be made, and this is where we have decided to focus this article. Generally, the use of a highly regarded platform is a good sign that any given brokerage is not a scam. Their own initial investment in the software demonstrates that they are taking trading seriously and there are two primary platforms to look out for.

SpotOption

SpotOption is the most widely used trading platform around, supporting more than three hundred brokerages around the world. At risk of sounding biased, it is also our favourite platform to use with the right mix of functionality and data. The company was founded in 2008 and quickly went on to become the dominant player in options trading, continually being considered the gold standard.
The solution offered by SpotOption comprises not just the trading platform, but also full interaction with the main brokerage website. The platform offers mobile trading through apps and mobile browsers, for example, and this is handled through a single backend that is related to the main site. Just as many blogs are powered by WordPress throughout the entire site, brokerages that use SpotOption are usually entirely powered by their white label software in the same way. The brokerages themselves then take care of marketing, client management and anything that isn’t directly related to the website’s operation or the trading platform. Essentially, SpotOption is reputable and this reputation often spreads to the brokerage itself which has everything to lose if it proves not to be reliable.

TechFinancials

If SpotOption is the gold standard, then TechFinancials definitely occupies the silver medal position. Virtually everything that we said about SpotOption above applies here too, as it is a similar white label package that crams in plenty of functionality and information. They too often stake their reputation on the integrity of the platform and a brokerage that conflicts with those ideals will not last long.

A brokerage that uses either of these platforms is a good sign, but they are not the only elements of trading to be wary of. Indeed, it is rarely the brokerages themselves that are an issue, but those offering supporting services. There is nothing stopping anyone offering trading signals and information related to options trading, but the fact is that when they do so, they often do so for a price. Some are worthwhile, while others are far from being worth the time of day. With no regulation in place, it is often down to the trader to either do their due diligence or even go with their gut feeling as this is the only area of options trading that we feel could potentially be susceptible to scams.