There are hundreds of options brokers operating online today. Many aren't regulated and these must be avoided at all costs. Of those that are regulated only a small fraction conduct transparent business.
One we found is IQ Option. Why do I say this? I and a group of other options traders run some tests to identify some of the ways “legit” options brokers use to rob traders of their money. This broker passed the test. So what ways do these brokers use? Read on.
Manipulating prices to control trade outcomes
Every trader has their preferred asset and trading style. These have been proven to work on many platforms. However, the broker owns the technology that you're using to trade. Therefore, they have the power to change prices at will.
Now if you have many winning trades, the broker might decide to use artificial prices to ensure that your trades start losing. This trick usually involves suddenly changing the prices by a single tick just before a trade expires. To identify this trick, you can open a different platform such as MT4 and run it alongside your broker's platform comparing the price movements in real time.
Manipulate the expiry time of the trade
Options are set to expire within a specific time frame. So when you enter a trade, it's important that you take a close look at the timer. Does the order get executed at exactly the time you set it to start?
Does the timer count down normally? And finally, does it expire at the intended time? Some brokers will manipulate their timers making their clocks run faster or lag behind to ensure that your trade ends up losing eventually making money for them.
Fishing for large investments placed on single trades
Brokers know that small wins will build your confidence. This tempts you to invest larger amounts in subsequent trades. But once you invest a large amount, the trades usually don't go your way.
This is a tactic used to ensure that you remain on their platforms as a trader. They will entice you with small winnings creating the illusion that you're making money trading options. Once you invest a large amount on a single trade, they will move in taking your money to recover your winnings and a good part of your account balance.
Server disconnects right before trade expiry
This is a classic way fraudulent brokers use to rob their clients. Once you've placed your order, you'll happily watch the price move as expected.
But just before the trade expires, the broker's server suddenly becomes disconnected. It could be an internet connection error on your side. But this doesn't mean that your trade isn't being executed.
Remember that the markets don't stop. Once the connection error is resolved (usually within seconds), you'll find that your trade lost.
Withdrawals mysteriously disappear
Many options brokers will have a specific timeline where withdrawals must be processed and deposited to their client's accounts. If this timeline expires, you're expected to ask why you haven't got your money.
Their support team should help you recover the lost money. Fraudulent brokers usually frustrate their clients by using hard to track support tickets until the client eventually gives up. So every time you make a withdrawal, make sure that a transaction receipt has been generated.
In addition, make sure that the broker you're dealing with has a mechanism that allows you to keep track of the withdrawals process.
The most transparent options broker today
Since 2014, IQ Option has offered options traders excellent service that's grounded on transparency. I have traded on this platform for over 1 year now and after running tests against these schemes other brokers use to rob their clients, I found that they're quite transparent. Open an IQ Option practice account today and start trading. Do your own tests to verify this. Good luck!
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