This myth is true. Why? The popularity of binary options is growing every year as brokers guarantee a profit of 50 to 100% in 1-15 minutes. Because of this, the market formed a lot of brokers who cheat their clients. However, these unscrupulous brokers is easy to spot: they usually do not have any certificate of control, such as a certificate from the CySEC.
When choosing a broker you need to, first of all, check whether it has control certificate, find out whether other traders recommend it. You can find this out on our website in the binary options section.
Where are options traded?
As a rule, trade is conducted within the company, that is your deal does not go on the interbank market directly. But do not worry, as honest brokers work with partners, such as large banks or brokers that already output on the market. If this did not happen, then the broker could be in a situation when there was no money to pay the traders, and it would have gone bankrupt, which is not profitable for either party. In addition, the regulators themselves control the situation with the financial operations, as in the case of violations, the regulator fines the company for a large sum, and in some cases up to several million dollars.
How does the binary options broker earn money?
As mentioned in one of the articles, the broker earns in the following way: the trader loses 100% of his deposit, and the other trader earns 70%, therefore a successful trader gets 70%, and the broker gets 30%.
Thus, not all brokers are crooks. There are companies that operate openly, have the appropriate license and do not chase money traders earn, but earn together with its customers.
When choosing a company, check their license, how many years they're in the market, read the reviews of real traders to entrust your money to a reliable broker.
Good luck on the stock exchange!