Are you looking for investments with high returns on the Internet? Be careful. Offers that promise a quick profit without risk can expose you to fraud, including schemes related to binary options.
Binary options 101
Binary options offered illegally on the Internet are akin to a game of chance or a lottery. You are invited to wager that an asset will rise or fall in value within a very short, specific amount of time, for example 10 minutes. The asset may be, for example, shares, a commodity or a currency. At the expiry time, you face two possible outcomes: a pre-determined “virtual” gain or the loss of your wager.
Despite what you are promised, it is impossible to make money with binary options on the Internet. The expected profit turns out to be negative and, what’s more, your losses will widen through obscure transaction fees. A number of platforms try to earn your confidence through simulated transactions using hypothetical amounts of money. You go through the simulations and generally come out a winner. But the simulations are far from reality. When you invest your own money, you’ll incur a loss.
Dice are loaded
Binary options trading platforms open to the public are often associated with scams, including identity theft, embezzlement and rigged platforms. The latter two schemes take place when an investor opens an account and starts winning wagers with small amounts. Once he feels comfortable enough, the investor often wagers larger amounts. However, the results are not tied to market fluctuations, but are manipulated for the benefit of the platform promoters.
The AMF has also noted cases where investors forwarded photo IDs to claim their profits. Unfortunately, in addition to never receiving their profits as promised, these investors could be victims of identity fraud.
Selling binary options to the general public is forbidden in Québec.
Always check whether the person and firm that are making investment proposals are authorized by the AMF to sell you the product. When in doubt, contact our Information Centre.