It took far too long, but binary options finally has the bad name it has so justifiably earned. And that’s why the former operators of unlicensed and unregulated binary options sites are now pretending to peddle forex and CDFs.
Unfortunately, there are some people who still don’t know, so a few binary options sites may remain online. But the crooks behind the countless binary options scams that inundated the internet from 2010 or so until early 2018 discern the sea-change and are getting out of the business. Sort of. That explains why they marched en masse to forex and CFD scams.
How Are Forex and CFDs Different from Binary Options?
Binary options scammers are quickly recycling their existing online platforms in order to market them as different, allegedly legitimate, investments. The two most popular of these are forex and CFD scams.
Forex (or FX), is a contraction of ‘foreign exchange.’ Forex is a type of CFD. But it is limited to the foreign currency market.
So what’s a CFD? It’s an abbreviation for ‘contract for difference.’ This trading model involves an investor (buyer) making an agreement with a broker (seller). One will pay the other the difference between the present value of some asset (gold, currency, public stock, or almost anything else that is traded) and its value at a certain time in the future (the contract time). If the asset’s value goes up, the seller pays the buyer. If it goes down, the buyer pays the seller.
For example, let’s imagine there was a contract for £100 worth of Microsoft stock with the contract expiring 24 hours later. If the value of Microsoft the next day were £110, the seller would owe the buyer his original investment plus an extra £10. The basic difference between a CFD and a stock, however, is that a CFD doesn’t involve any ownership of the asset. The investor is basically just betting on the trends in the asset’s value. In this way, trading CFDs and binary options is so similar that switching over platforms from one to the other was a snap. The con artists are back in business.
CFDs Are More Dangerous than Binary Options
In fact, CFD scams are actually more hazardous than binary options. In the case of binary options, the worst that could happen with any trade would be the loss of the entire investment. But if there’s a volatile market, CFDs potentially expose the investor to losing far more than the investment, The result is a crushing debt.
Of course, if you win on a CFD you will be able to make money only if your broker is licensed. No one can set up a legitimate brokerage and offer such investment services if he does not have a licence issued by the country’s financial regulator. Generally, scammers are not registered at all. Which means they are not trading anything at all. And to escape justice, they are not physically present in a country with a robust regulator and an effective law enforcement system. All they are doing is stealing your investment the moment you deposit it. Understand this: they’re thieves.
Sooner or later the victim gets it. In most cases, the victim gets it after losing a lot of money.
Are you the victim of a forex or CFD scam? And where is your so-called broker now? Bringing him to justice, if you can even find him, can be nigh impossible.
But at the very least, don’t you deserve to get your money back? If you paid the scammer with a credit card, that may be possible. Regrettably, successfully opening and winning a dispute in such cases is encumbered with an astonishing amount bureaucracy and red tape. The good news is you have someone on your side.