Brokers Make Money
An honest broker, which is
usually licensed and
regulated makes their money based on trading volume. A report was
put out last year with data from binary options trader in Japan showing
that 85% of traders lose their money! That means that it is very
profitable to be a binary options broker.
There is still that 15% of
traders, who manage to take money out of the broker.
Another trick that brokers use
to make money is by offering traders a bonus. The “bonus money” which is
a sales gimmick that many traders no longer fall for works like this. A
trader opens an account with a licensed broker. The brokers salesman
offer the trader a bonus to “help them start trading”. The trader
doesn’t realize that the bonus money comes with certain conditions.
Traders should read each brokers terms & conditions page for specific
details. The biggest problem with bonus money is that there is a trading
volume requirement of anywhere from 15 – 50 times that amount of the
Brokers Make Money
The ways that scam binary
options brokers make money are a few ways.
In order to provide a facade
that they are legitimate, they offer to help you make money. The will
get your permission to trade on your behalf, and manipulate the software
so that your trades are winners.
The broker will give you an
automatic bonus, thereby locking up your deposited funds so that you
cannot withdraw it. They will place unauthorized charges on your credit
The broker will become your
best friend to build up your trust and get you to deposit $10,000.
Everything will seem fine and
good with the broker until you ask to withdraw your money, and then the
Withdrawing money from an
unlicensed and shady broker is almost impossible. Since they are not
a bank, you cannot automatically withdraw your money. All withdrawals
are processed manually by a clerk.
In the event that you did not
receive a bonus, and you are eligible to withdraw your cash, they make
the process difficult. They start asking for a ton of verification
paperwork. The salesman gets on the phone and starts pitching you to
deposit more money for an unbelievable trading opportunity.
When you lose money, the
broker makes money.
I fully agree with the information above.
I have tested several Binary Option companies for a period of more than a
year to see what will happen. I even went as far as to give the "very
professional senior brokers" permission to trade on my behalf.
Some ran out of my money very soon.
At Option Rally they forced me several times to add money to the account in
order to protect the risk, even though I asked them not to use all the money
In trading the term "churning" is used where a broker will trade in such a
way that he will earn commission for him and his company, but the client
whose money is at risk for every trade done, will not make any profit. The
amount of money in the account will remain more or less the same.
Many companies will see churning as unethical and illegal and will prevent
unscrupulous brokers from abusing clients' money and trust in order to
generate income for themselves.
It is clear that they "churned" the
account for the whole period, generating profit and commissions for
themselves and not passing anything onto me.
They were very upset when I informed
them that I'd like to close the account and withdraw the money, and there
are many excuses and reasons as to why the money cannot be deposited to my
I think I have said enough.
You are welcome to contact me with questions / suggestions.