Types of trades on market are booming, bringing new trends and technological aspects on the market. As binary options offer gigantic profit prospects and at the same time simple decisions. But authorities warn of the risk and of criminals (dubious websites). However, not all websites or brokers are involved in fraudulent activities, one of the most trustworthy and reliable platforms is Pocket Option, check out the pocket option review here.

Gigantic profit prospects and simple decisions are the dreams of every investor. So-called binary options basically offer both, but for many investors, they have become a nightmare. While business with these special bets on market developments is booming around the world and the industry is praising financial derivatives as a legitimate investment method, critics see some providers as pure fraudsters.

"All or nothing" principle

The principle is simple and works according to the motto “all or nothing”: the investor bets a sum on a certain market trend, for example, the development of the dollar against the yen. If the US currency rises within a specified period as predicted by the investor, he or she can win up to 70 per cent in addition to the stake. But if the customer typed wrong, everything is gone.

So the risk is high, although it can get worse with some other derivatives. Investors there may have to add more money so that the loss can add up to a multiple of the stake.

Betting on short-term trends

Binary options are very simple bets on the development of two different reference values. For example, you can bet that stock X will perform better than stock Y within a certain period of time. Exchange indices and commodity prices can also be compared with one another. Sometimes it's just a matter of hours or even minutes. Because of the unpredictable fluctuations in such a short time, critics speak of gambling rather than investing.

In addition, allegations of fraud against individual providers are increasing. British authorities have issued a general warning against brokers offering binary options. France's financial regulator classifies the entire industry as "high risk and very dangerous".

Israel has already pulled the ripcord

In a recent newspaper interview, BaFin Executive Director Elisabeth Roegele, who is responsible for German securities supervision, “wholeheartedly” backed a corresponding warning from her colleagues at the European authority ESMA. However, it left open whether BaFin is aiming to ban binary options.

Israel, a kind of centre of the industry, has already pulled the ripcord and banned the products. In the US, trading is only allowed on controlled markets, while in Europe, despite increased restrictions, it continues to flourish on hundreds of unregulated Internet platforms. There are therefore no reliable figures on the market volume.

At the brokerage company CMC Markets, which is also active in Germany, binary options only make up a small part of the business, says Craig Inglis, head of the German and Austrian business. "With binaries, we have fulfilled a wish of our customers, but we do not lure anyone with misleading advertising and high return promises."

Dubious websites

Unregulated trade in particular - especially in the vast expanses of the network - opens the door to manipulation. So it can sometimes happen that everything is lost even if you typed correctly.

Jutta Strake, for example, complains about this: The 58-year-old self-employed management consultant said she wanted to strengthen her financial cushion for retirement after losses with share transactions and invested $ 13,000 in the company NRGbinary, which originated in Israel and later was based in Seychelles. An employee allegedly based in Great Britain had advertised in e-mails that there was little risk and that the profit was as good as certain.

But then Strake's assignment was moved from one account to the other without her permission, and in the end, he was gone completely. The woman from Cologne went to the police, but the previously so eager advisor was nowhere to be found. She also asked the Israeli embassy in Berlin for help - in vain. "If you've been ripped off, nobody helps you," says Strake.

Fellow sufferers exchange ideas

In the meantime, the cheated woman is one of the leaders of the online forum "Forex Peace Army", where fellow sufferers from all over the world exchange their experiences. According to your own information, you have lost many millions of dollars with various providers. The company NRGbinary appears again and again on the victim's website, which did not respond to Reuters inquiries about the allegations. It has already been banned in several countries, but its staff seem to continue using the old model, including company names.

Providers like NRGbinary are causing displeasure in the industry, for example at Nadex, the largest US platform for binary options. "We have long been concerned that these people are damaging our reputation abroad," says Nadex CEO Tim McDermott.