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Best Binary Options Brokers 2020:
  • Binarium

    Best Binary Options Broker 2020!
    Good Choice for Beginners!
    Free Trading Education, Free Demo Account!
    Get a Sign-Up Bonus Now!

  • Binomo

    2nd in our ranking!

Binary Options Recovery Scams – The New Villain

Binary Options Recovery Scams – The New Villain

Scamming those who have been scammed! So-called recovery experts are scamming those who lost money to online trading scams.

Many individuals who have come across Broker Complaint Registry will, unfortunately, be accustomed to a whole gamut of fraudulent binary options and forex brokers that made up a large swath of the online trading industry. From fixing trades, denying withdrawals and enabling horrible trades, numerous brokers made millions conning innocent people of their hard-earned money.

Because of these aforementioned reasons, a number of regulatory authorities across the globe have now barred the sale of binary options to retail traders. Just a few weeks ago, for example, the European Securities and Markets Authority (ESMA) proclaimed that it would be extending its binary options ban for an additional three months.

These sanctions may stop traders from being conned in the future but for those who have already lost their funds, it only provides minor solace. In fact, getting funds back from con-artists, who are almost completely anonymous, has been a challenge for most binary options other online trading scam victims.

Scam Recovery Service – The New Villain

Unfortunately a new sort of scammer – the so-called ‘recovery expert’ has come onto the scene. They specifically prey on those scam victims and often convince them to part with even more of their money and – they’re pretty good at it.

Finding these recovery scam-artists is not too difficult. Just take a look at the comments section of any news article pertaining to forex or binary options trading and you are likely to find a number of posts with the form of the following message: I lost a ton of money trading binary options with ‘xyz’ company, thankfully company X recovered my money for me – just email company X here to find out more.

Here at Broker Complaint Registry, we have discovered a number of fake recovery websites with the same layout: phony office addresses, fake US phone numbers, no license or regulation and no clear indication as to who actually works or runs the company.

One of these companies, Finance Fraud Recovery has a number of positive reviews dating back to May 2020 when in fact they only came into existence approximately one month ago. These are the type of scams victims are facing after they have already been scammed once.

Another website, Optionsrefund, lists its address as being in Christchurch, New Zealand and provides users with a US contact number. The site, however, was registered in Canada and the person that set it up did not provide any name or contact information. Trying to figure out who runs these sites is challenging but, in a number of cases, we can certainly tell that they are not based where they claim.

Beware of those non-regulated fund recovery services

The online trading industry is fraught with non-regulated brokers such as Greenfields Capital to KayaFX masking to be legitimate financial service providers. The same stunt is being pulled in the fund recovery industry. These companies dupe their hapless clientele by claiming to have incriminatory intel against these scam brokers and charge an upfront fee in order to get the case off the ground require up-front, with the minimal likelihood of ever seeing that money again. Remember it is not the initial payment that is problematic as almost all legitimate companies in any industry require some sort of a down payment. This is especially true in the fund recovery business as it is not a given that they will be able to recover the money as there are so many mitigating factors that go into each and every case.

Best Binary Options Brokers 2020:
  • Binarium

    Best Binary Options Broker 2020!
    Good Choice for Beginners!
    Free Trading Education, Free Demo Account!
    Get a Sign-Up Bonus Now!

  • Binomo

    2nd in our ranking!

A number of these fake recovery companies even offer state of the art hacking services. Take Binary Options Recovery Specialist, their hacking services include password recovery and credit score editing in addition to their binary options recovery resources. Anyone who wants to utilize any of their services must also pay in some form of cryptocurrency – making it practically impossible to determine where the money is actually being sent.

How can this be prevented?

There is one predominant factor that is driving these scam websites. Those that have lost money from binary options and other online trading scams are generally desperate. These are not multi-billionaires or millionaires who can stand to lose a few hundred thousand dollars or pounds but regular individuals who probably forfeited their whole life savings.

Anyone in that unfortunate situation is almost always desperate for assistance especially when the regulators and other authorities are often at loss as to how to take down these scammers as they are often located offshore. This is where the recovery scam artists come in as they claim they have the necessary capabilities to pursue these binary options and forex brokers.

Preventing such people from operating seems like a Herculean task. Those that own the sites are often difficult to find and, as soon one is shut down, another pops up somewhere else along with a recovery firm targeting those victims. However what you can do is alert us at the Broker Complaint Registry, the financial ombudsman, your banks, social media and everyone in between. Additionally, when you submit a complaint to us we will review it and put you in touch with a regulated fund recovery service or lawyer that specializes in financial fraud.

Listed below are seven scam recovery companies that we have received complaints against. If you were a victim please submit your complaint here. Obviously, there are additional fraudulent recovery companies that are operating if you are aware of them please send us an email at [email protected] and we will do our best to spread the word

  • Capital Chargeback
  • Optionsrefund
  • Finance Fraud Recovery
  • Binary Option Asset Recovery
  • Financialchargeback
  • First Options Recovery
  • WorldTradersRecovery

Binary Options: Scam or Opportunity?

We’re recently getting more and more contracts for coding binary option strategies. Which gives us a slightly bad conscience, since those options are widely understood as a scheme to separate naive traders from their money. And their brokers make indeed no good impression at first look. Some are regulated in Cyprus under a fake address, others are not regulated at all. They spread fabricated stories about huge profits with robots or EAs. They are said to manipulate their price curves for preventing you from winning. And if you still do, some refuse to pay out, and eventually disappear without a trace (but with your money). That’s the stories you hear about binary options brokers. Are binary options nothing but scam? Or do they offer a hidden opportunity that even their brokers are often not aware of?

Binary options, in their most common form, are very different to real options. They are a bet that the price of an asset will rise or fall within a given time frame. If you win the bet, the broker pays your stake multiplied with a win payout factor in the 75%..95% range. If you lose, you pay the stake minus a possible loss payout. You’re trading not against the market, but against the broker. The broker needs you to lose, otherwise they would not make any profit. Even if they really pay out your wins, and even if they do not manipulate the price curve, they can still control your profit with their payout factors. So it seems that even if you had a winning system, the broker would just reduce the payout for making sure that you lose in the long run.

However this conclusion is a fallacy. It can in fact be of advantage for the broker to offer a payout that allows you to win, as long as most other traders still lose. A broker has not the freedom of arbitrarily reducing the payout. He’s competing with other brokers. But why would you want to trade binary options anyway, when you also can trade serious instruments instead? If you wanted a binary outcome, you can also achieve this by opening a Put or Call Spread with real options – and this with a serious broker, much higher payout factors (even > 100% in some cases) and the possibility to sell the options prematurely.

But aside from tax advantages in some countries, there is one single compelling reason that might make a binary options trading experiment worthwhile. Profit and trading cost of a binary option are independent of the time frame. So you can trade on very short time frames, which would be difficult, if not impossible with real options or other financial instruments. You can find a discussion of this problem in the Scalping article.

Binary scalping math

The required minimum win rate for binary trading can be calculated from the broker’s win and loss payout:

W = required win rate for break even
Pl = Loss payout
Pw = Win payout

With 85% win payout and no loss payout, you need a win rate of

54% win rate seem to be manageable on short time frames. The transaction costs of a non-binary, conventional broker would require a much higher win rate, as in the following graph from the Scalping article:

Required win rate in percent vs. trade duration (non binary)

You had to win almost 80% of five-minutes trades – impossible for a trading system under normal conditions unless you enforce that win rate with some tricks, which however won’t help getting in the profit zone.

So, smaller trading costs on low time frames are the obvious benefit of trading binary options. With all the side benefits of low time frames, such as more data for backtests, and shorter drawdown periods in live trading. But how can we take advantage of that? There are three problems to solve.

Three steps to potential binary profit

  1. Find a strategy with a win rate that is better than the W determined with the above payout formula. But be aware that prices on small time frames are strongly feed dependent. Normally you won’t know your binary broker’s price source (if he has any at all). For being on the safe side, test with different historical price data from different serious brokers (f.i. Oanda or FXCM) and stay some percent points above the minimum W.
  2. Find a way to trade automated. Binary brokers often do not want you to do that. Consequently most do not offer a platform or API for automated trading. But they all have a web interface. So you need either a software tool (such as Zorro) that can send key strokes and mouse clicks to a website, or some other means to get your trades to the broker.
  3. Find a broker that’s halfway honest. At least one that allows you to really collect your gains. All binary brokers make it easy to deposit, but some follow the philosophy: “If you gave it to me, it’s mine.” Make test withdrawals before you deposit large amounts. Keep the account balance small. Check the broker’s opportunity to manipulate the price curve: the more customers they have and the more bets they handle, the more difficult is it to manipulate without attracting unwanted attention. Retrieve as many information as possible about your broker: Where are they really located? For some reason, fraudsters seem to be concentrated in Tel Aviv. Check what customers say about that broker – but be aware: positive statements on trader forums are often planted by the broker himself.

All those issues make trading binary options sort of “messy”. However it’s the messy methods that sometimes offer the best opportunities. Ed Thorp made his first millions not with ‘serious trading’, but with a Blackjack strategy and with a method to estimate the value of warrants, both also considered messy and hard to calculate at that time.

Step 1: The system

A price curve is no random walk. At least not all of the time. Long time frames are often dominated by trend, short time frames by mean reversion. When transaction costs do not matter, it’s not very hard to find a system with > 54% win rate on 5-minutes bars. Here’s a simple example that exploits the mean reversion tendency of short time frames (script for Zorro):

In the C code above we defined an individual objective() function that optimizes the system for binary trading. It measures the system performance as the number of winning trades divided by the number of losing trades. Otherwise the optimizer would hunt for the most robust profit factor, which makes no sense for binary trading.

The setup establishes a 5 minutes bar period, which is the time frame of our bets. We use 20 WFO cycles and let the optimizer use all CPU cores but one. This way the training run takes about 5-10 minutes for 5 years data. The BINARY flag activates binary trades, and we’re simulating a broker with 85% win payout and no loss payout.

We have a mean reverting system that trades whenever the current price is closer than a threshold – here, 1% of recent volatility – to its previous High or Low. The time period for determining the High and Low is the only system parameter that we optimize. You could improve the system in many ways, for instance by optimizing also the threshold, by modifying the objective() function so that it prefers systems with more trades, and by applying a filter that prevents trading in non mean-reverting market regimes. Since we bet on the price in 5 minutes, we’ve set the LifeTime of a trade to one bar. Here’s the equity curve from a 5 years walk forward test with EUR/USD:

The system has about 56% win rate and a notable, although not spectacular positive return. Which is not achieved by the crude mean reversion mechanism, but mostly by amplifying the small entry-exit price differences through binary trading, even though the payout is only 85%. You won’t get a similar result with conventional trades. The same system not trading binary options, but leveraged forex positions produces a very different equity curve (for testing, comment out the BINARY flag and the Payout settings in the code):

With the same trades we have now only 40% win rate and an overall loss, since all the trade profit is eaten up by spread and commission.

Step 2: Automatizing

How do you let your script automatically enter a bet at the right moment? This is a technical issue unrelated to trading, but it comes up whenever you have a broker with a web based platform and no proper connection for automatizing. Here’s a code snippet for detecting the positions of [Buy] and [Sell] buttons on a website, and automated clicking them:

Start the script, and wait until the broker’s website pops up in your browser. Then follow the instructions in Zorro’s message window. Manoever the mouse onto the “Buy” button and hit the right mouse key. Then do the same with the “Sell” button. The script will store the button positions and then use the keys function to send test clicks to both positions of the active window. For testing purposes I’ve imitated a typical binary broker’s trading platform.

You now only need to glue together your trading script with the button clicking script, and adapt the latter to the website of your broker. This is left as an exercise to the reader. And better use improved versions – the scripts here are kept simple for demonstration purposes. As long as the script trades, make sure that the browser window stays in the foreground, or else it can not click on the buttons. For the position size, either enter a fixed size for all positions, or let your script click into the size field and send key strokes to set individual sizes.

Step 3: The broker

Of course I don’t want to recommend a particular binary options broker. In the end, they’re all crooks – but some are crookier than others. Finding a suited broker is, also, left as an exercise to the reader. Binary broker comparison websites are often – surprise, surprise – installed and paid by binary brokers. US citizens are normally not allowed to trade binary options with brokers that are not regulated in the US. Some brokers will accept your deposit nevertheless, but use that as pretext to refuse payout. If you’re a citizen of Israel, you might not be accepted by many binary brokers since they’re not allowed to fraud compatriots.


It’s often the “messy” and despised trade instruments that can still provide opportunities when they are correctly understood. I’ve uploaded the two scripts to the 2020 repository. You’ll need Zorro 1.52 or above for running them. When you now make huge profits with binary options, don’t forget where the money comes from: Not from the broker, but from his less fortunate customers that maybe just haven’t read the right blog.

Addendum: From all articles on this blog, this one attracted by far the most spam comments. From them it appears that a new lucrative business has established in the orbit of binary brokers: recovery fraud. As soon as you’ve lost your money, you’ll receive offers by “hackers” or “law firms” to recover it, for a fee of course. Where did they get your email from? Naturally from the very broker that bagged your money…

82 thoughts on “Binary Options: Scam or Opportunity?”

Thank you for this article. Would you happen to know of any software out there, or a model, that cap produce a binary risk curve over time? Similar to the risk graphs created by traditional options software? I found one on Wolfram but I can’t change the security prices. It would be very helpful for me to understand binary prices over time and volatility levels.

I don’t know such a software for binary options, but you could probably calculate the graph with the standard Black-Scholes algorithm, just as for a normal European option. The question is only what you would do with this information, since you can normally not sell a binary option during its lifetime.

I have an account at Nadex and you can buy and sell them (close out a position). So I would be helpful for me to mode out the possible prices over time.

I bought your book recently and really liked it. Lots of great ideas for trading algos. I’m glad I understand some German.
Here a question regarding your article:
I’m a complete newbie to binaries, so please forgive my ignorance.
You say that the trading cost does almost not depend on the the time frame. Obviously, when you put on a lot of trades in a short time, the expected profit is usually small, so it can easily get eaten up by commissions. As far as I understand, the payout of a binary is fixed, so it is always the same whether your trades last 1sec or 1000secs, which makes it in some sense time-independent. However, (and this is where I’m a bit green still), binaries have a fixed expiry date, so our profits are in some sense bound to the time to expiry and get smaller the closer our trade entry get to it. On the other hand, the closer we get to expiry, our probability of reaching a certain target price increases as the path divergence from spot to expiry gets smaller. So, in my naive understanding, the algo you presented above should only work optimal for a given time in the day that is n periods away from expiry. I’m probably wrong but I would like to hear your opinion of why this is not the case.

PS, I think it should be fairly easy to model binary options with Monte Carlo rather than Black Scholes, as it is easy to put all sorts of constraints in it. I’ve done this with Barrier Options, it’s slower but quite effective.

Do you intend on translating your book, or I’ll have to buy the e-book and them Google translate it? =)

@ Jeremy, Tom: I had not heard of Nadex before, but they indeed allow to exit an option before it expires. This article was only about the usual options with a fixed duration and costs independent of duration, but exiting options opens new interesting possibilities. A risk graph makes then a lot of sense. Maybe that could be the topic of another article. – @ Gonzatti: Yes, I’ll translate it when I find the time.

Informative and entertaining as ever. Many thanks. Jeremy, Tom – thanks re Nadex. Interesting.

hi, very interesting article, me too have an account at Nadex. and they have a very good and and informative site with huge amount of info. could u check their platform and how we can use this platform with Zorro app.

with best regards

From what I see, Nadex seems not to provide a direct connection. So you would need a script like above under “Step 2” or some similar solution for controlling their trade platform.

Thank You for this informative contribution. The expiration time of the option may no doubt also be an interesting parameter to look at, although it is very broker specific what it can be set at. I have been trying to exploit this additional parameter, since in zorro there is the possibility of adjusting the ExitTime from the BarPeriod to some other value (I inserted after “LossPayout = 0;” simply ExitTime = 15; for instance). Surprisingly, if I do so with the above script the test result is always the same which can certainly not be correct. Why does this fail?

Because your ExitTime is overridden by the LifeTime setting. You can use either ExitTime or LifeTime for the duration of a trade, but the recommended method is LifeTime. – You can find those issues by looking in the logfile. There you can see how long the trades last and which profit they make.

great article, in my experience the binary options is good, but requires an strategy and some education, i have some profits, I apply martin gala system �� Kisses

Seems that LifeTime param. is not actually documented in zorro manual page at least I couldn’t find it. Would like to know the difference between ExitTime vs LifeTime

GoMarkets has binary options on their MT4 platform, trading from your normal account.
I think there are a few other’s out there too.

Yes. Some brokers provide binary options through the FX LITE MT4 plugin. You can then trade directly with Zorro through the MT4 bridge and need no button click function. Only the time frame of the bet must be set up – as far as I know – in the order comment field.

What about position sizing?

Probably via lot size, but I found no detailed documentation. I’ll inquire with the developer of the FX LITE tool.

Ok, according to the developer this is the MQL4 command to bet on a rising price with FX LITE:

and the corresponding Zorro code:

brokerCommand(SET_ORDERTEXT,”BO exp:60″);

“Size” is the position size in units of the broker’s minimum size, like 1$. “BO Exp:” sets the duration in seconds. If you want to change the position size on the broker’s web interface, it’s just as with clicking the buttons: let the script click into the size field and then send key strokes for setting the size.

Great & interesting example Johann – thanks for sharing.

How does Zorro evaluate the binary option success? From the code, the ‘set(BINARY)’ is used to automagically evaluate the success of the prediction. In my own simulations of the same algorithm (EURUSD, last 5 years, 5min periods), the win rate is about 60% if the mean of the next period is used to determine success – but 52% if the close of the next period is used (more noisy)

Also, some binary options brokers (like IG Index) quote a threshold price which is their prediction of where the market price will be in 5 mins. Our algorithm needs to determine whether the market price is likely to be higher/lower than the broker’s own estimate on expiry (not the market price when the bet is placed). This is hard.

The close is used by Zorro. The mean would be wrong since it’s no real price. However 5-minutes data is highly feed dependent, and you will likely get different results with different brokers. Zorro uses FXCM price data by default, but it’s better when you backtest with price data from the very broker you trade with.

It’s interesting how many variants of price bets are offered by binary brokers meanwhile. Using a predicted threshold would effectively prevent an algorithmic system since you can not backtest it.

Here is a complete list with all scam brokers. Maybe you can add it to your article: http://www.howwetrade.com/binary-options-scams/

I get this message:

BO compiling…….
Error in ‘line 27:
‘SET_ORDERTEXT’ undeclared identifier

“Undeclared identifier” means that your software does not understand what you’re typing. Either your version is too old or you did not type it right. This blog is not really a good place for programming support, but the user forum is. There you can also get the newest version.

How do I recover stolen Bitcoins by fake binary options brokers?

a ToS d iQl lvrPt b qDWPR y NDrG H U g p ffj w V o mJv r xOa k zNLT

What should you do if you’ve been the victim of a scam?

If you think you’ve been scammed there are three things you need to do:

Stop sending money straight away. If the payment has been set up as a Direct Debit, get in touch with your bank to stop this immediately.
Report the scam to REX WEALTH RECOVERY

Beware of follow-up scams. Sometimes after reporting a scam you might get targeted again by a fraudster who says they can get your money back.
Check your credit file for free through, credit karma,MSE credit club, and clearscore . You’re best to check it monthly for credit applications done by .

Best Binary Options Brokers 2020:
  • Binarium

    Best Binary Options Broker 2020!
    Good Choice for Beginners!
    Free Trading Education, Free Demo Account!
    Get a Sign-Up Bonus Now!

  • Binomo

    2nd in our ranking!

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