Learn from Lowell & Nick, Avoid Unregistered Binary Options Platforms – Moneyshow.com

Lowell Enlow was a contractor for NASA and operated several insurance agencies in Florida. Nick Morrison is a store manager in Illinois. Despite their years of investing and financial experience, both men fell victim to a sophisticated online fraud.

They thought they were investing in a highly liquid options market that offered quick returns with a low cost of entry. Instead, they were lured into an unregistered binary options trading platform run by an off-shore operation.

These are their stories, which show just how difficult it can be to recognize binary options fraud when it’s happening right before your eyes.

True Fraud Victims: Lowell & Nick

When Lowell first heard of binary options in an email, he wasn’t looking to make a fortune. He already had a healthy retirement stowed away. He was simply seeking a little more security. All it cost to get his feet wet was a few hundred dollars, so he saw no harm in it. But by the time he recognized the scam, Lowell had lost more than $60,000.

Nick first caught wind of binary options on an investor message board. There was a lot of chatter over this exotic way to trade. But after trying it himself, Nick lost more than $3,500 to the scam.

In all, this one fraudulent binary options operation stole more than $1 million from thousands of people just like Lowell and Nick, with a sophisticated website, the appearance of profits, and smooth sales tactics.

Understanding Binary Options

Traders use binary options to hedge against unforeseen circumstances, such as weather events. Unlike other options, there are no strike prices and traders don’t get the choice to exercise the option. Instead, traders take a position on a specific market event to occur at a specific time. If the event happens as predicted, the option pays a return. If not, the trader loses all of his or her money.

What’s real and what’s not

There are registered binary options exchanges in the United States. Registration is important because it means the exchange meets specific regulatory requirements for liquidity, safety and customer protection that are enforced by the U.S. Commodity Futures Trading Commission or the U.S. Securities Exchange Commission. 
But if a binary options trading platform is doing business in the United States, soliciting money from U.S. residents, and is not registered with CFTC or SEC, it is likely fraudulent.

Read on to learn tactics fraudsters use to dupe unassuming investors at SmartCheck.gov.

This article was prepared by the Commodity Futures Trading Commission’s Office of Customer Education and Outreach. The article is provided for general informational purposes only and does not provide legal or investment advice to any individual or entity. Please consult with your own legal adviser before taking any action based on this information.

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