Binary option has supposedly taken Forex and stock trading to a completely new level. With new and improved technologies, brokers are providing platforms that claim to make trading super fun, quick, and effective. If binary option is an actual trading instrument and is not gambling then it has successfully taken out all the boring elements from normal trading and have replaced it with a fast and interesting platform.
Is binary option Gambling?
There are two sides to this story. If you ask this question to a broker, then most of them say no i.e. they will claim that it is not gambling. On the other hand, there are several clear indications that suggest binary options is gambling. Just for the record, it is my personal opinion too i.e. binary trading is 100% gambling.
Majority of brokers will tell you that options is not gambling, and they will defend their position by giving different reasons. An account manager once told me during a phone conversation that their website is connected to some network by which their site get real-time trading data from the markets, and when a customer wins a trade, a third party pays the profit. “His company wants its customers to win as many trades as possible; on each trade customers execute, our company receives a small commission by a third party,” he added . He further explained that when a trade ends in a draw then they don’t get any commission; they receive commission only when a trader either wins or loses a trade.
Binary option brokers lie!
The account manager continued the story and said that they want traders to win and make money so that the company can continuously get commissions. “If a customer loses all his money and stops trading, we stop getting commissions,” he said.
If what the account manager said is true then all of this could make sense. Traders win trades and make profit while the broker gets commissions; it seems to be a workable system that actually does exists in ECN Forex Trading. Another thing they brag about is being a licensed entity. Most brokers reside in Cyprus and they get their trading license from Cyprus Securities and Exchange Commission [CYSEC]. They ask traders to trust them blindly because they are regularized by CYSEC.
Binary brokers are trying really hard to give the impression that what they do is same as Forex Trading and I must say they are doing a great job, however; there are several unanswered questions like, who exactly is this third party? Moreover, if majority of traders make money then how is it surviving? How does it make money for itself?
Broker want to make, not lose money
Companies do business to make money for themselves; they don’t do it to make other people rich.
If you search on Google, you will find tons of withdrawal related complaints against majority of brokers. Traders who are able to make profit are not getting their money from brokers; they make up numerous excuses for not paying. Why do they have such a hard time paying profits to the traders?
You will find countless complaints against famous brokers who spend thousands of dollars every day on advertisements. They will make up all kinds of lies to hide the truth.
Nevertheless, there is hope. There are few honest companies in this otherwise awful business, one of which is MarketsWorld. This broker is famous for paying profits without any issues. Unlike other dishonest ones, they operate under the law.
MarketsWorld or MW is the only financial betting site that operates in Isle of Man, UK.
Gambling Supervision Commission [GSC] regulates this company. Gambling Commissions do not regulate currency-trading companies, so if binary option is not Gambling then why does GSC regulate MW?
In online casinos, if you play and win, the casino owner pays you the money from his pocket. You win and the casino loses. Binary trading operates in the same way; the real name of this business is “Financial Betting.” Binary options trading is completely false label for this business.
A live chat representative of MW gave the following statement:
“However since all trades you buy are against the company, we view it as a conflict of interest to offer trading advice directly.”
Here is a screenshot of the live chat discussion:
It is up to you to decide whether this is gambling or not. Additionally, you should know that making profits in this business is only possible if you can come up with a good trading strategy otherwise, you will lose all your investment. Brokers advertise this as an opportunity that you can use to get rich quick; these are all lies. Without a solid working strategy, you cannot make profits.