What are the main complaints against Binary Brokers?

Most of the negativity surrounding binary options has to do with certain practices that are coming to light recently that make the binary options industry not look quite as legitimate as it paints itself out to be. We want to list them here so that you may provide us with feedback as to where you have experienced such things, with what brokers, on what trading platforms, as well as any issues you would like to share in the comments below.

The first of these gripes is that while most binary brokers insist that unlike Forex they do not impose on a spread in order to get into a market, in a way binary brokers do without being as upfront about it as FX. The way this works as many critics are pointing out, is that say you purchase a Call option on EUR/USD, sometimes if you compare the price listed on the binary trading platform you are using with the current market price it may be a few pips off. While this may not seem such a big deal in binary options it is, especially when one of the ways being used to sell this type of trading is that it does not matter how many pips you are in the money as long as you are in the money. Well, the same goes the other way around, even a pip out of the money and there go not only your profits but also your investment capital as well. One of the arguments used to make the problem go away is that if there is a difference it is only a delay, that the price action will still move in relation to the market price, so that if it cost more to get in, it will be higher at expiry too. However it is starting to look like this isn’t the case, we’ve observed cases ourselves where at the time of expiry the price snaps back to the true market price leaving the trader out of the money.

Another common complaint is that withdrawals are not as easy as is made out at sign up. This has to do with accepting the bonus. We have already discussed this topic on numerous occasions so there’s not much need to reiterate everything here. Suffice it to say that bonuses come with strings attached, there is no such thing as free money, so either don’t accept the bonus from the get go, or inform yourself as top the conditions of the bonus you’re accepting. Simple as that.

One more thing I have seen come up recently is that certain customers have been complaining about their screens freezing or being very slow and stuttery at certain times while trading. This seems like a bit of latency manipulation on the brokers end, slowing down the platform at volatile moments so that timely trades which expire in the money can’t be locked-in in time.

Finally we’ve heard reports recently of certain assets being dropped for no reason whatsoever, low liquidity seems to be the explanation given but seeing as binary brokers don’t actually purchase the assets you are trading liquidity shouldn’t be an issue. This sounds much more like something taking place in the market (gold being a recent example) which has the effect of making in the money trades much more easy to make. When a trend is too obvious and too well established it seems as though the only thing a binary broker can do to stop its own losses, is just pull the plug on that particular trade until its movement begins to look a little more random.

 

Have you experienced any of these issues, are there any other tricks that you have picked up on? Please share your experiences with us in the forms below.

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George Milios

George Milios is the founder of onlineforextrading.net, the binary options and forex news portal which is dedicated to providing you with all the information you need to successfully trade.

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