Binary Options Savings Account: A Big No-No!
There’s a new beast roaming the binary streets. When you see it, please don’t pet it, don’t feed it, don’t interact with it at all ‘cause it will bite your hand clean off. Actually, it’s your wallet that this beast is interested in – it will chew on it, drool all over it and then finally swallow it whole. Its name: Economicus Accounts Maximus Profitus aka the Savings Account, aka Fixed Income Account. Beware!
Exploring The Outer Limits Of The Scam Universe: What Is A Binary Savings Account
The first step in avoiding the beast is knowing what it is and how it looks. Here’s the simple description: it looks too good to be true… and you know what they say about things that look this way. But let’s stop running around in circles: the savings account is a type of account offered by certain brokers, that guarantees a return on investment (profit) every month. Your account will be managed by the brokerage so you will not have to trade at all, just invest your savings and collect the profit at the end of the month. Some brokers say they will make you 10% monthly (that’s 120% every year – wow, just wow), others don’t give fixed numbers and instruct you to contact an account manager.
If 10% monthly is not enough for you, then hear this: your investment is guaranteed by the brokerage, regardless of market behavior. In other words, you can only profit and in case the account drops below the initial investment, the brokerage runs to the rescue and gives your money back (*cough* bullsh!t *cough*). Think about this: when you win a binary options trade, the money comes out of the broker’s pocket (that’s the case with most brokers). So with this Savings Account, they screw themselves two times: if they make you 10% monthly, they have to pay and if they lose your money in the market, they have to cover the loss, so they have to pay… again. By promoting this Savings Account they are guaranteed to lose money! Now, do you actually think that a brokerage is a charitable organization? LOL, I don’t!
So, What’s The Catch?
There has to be a catch, right? Sure there is: if you want to withdraw profits, you will have to reach a certain turnover (hmm, is this a bonus or a savings account?). Usually, you will have to turn over the invested funds at least once, meaning that if you invested 1,000 USD, you will have to reach a trading volume of at least 1,000 USD. Oh, and there’s a time limit also. Ok, now let’s go back a little: remember that when you open a Savings Account (or whatever it is called by different brokers), your money is controlled by the brokerage and all your trades are placed by their Account Managers. I honestly don’t think that an account manager, working for Broker XYZ will place enough trades to reach the required turnover within the allotted time limit, thus making Broker XYZ lose money. Even more, I don’t think they will make you 10% profit every month… or profit, period. This is, of course, my personal opinion and I might be wrong but if I’m wrong I’ll be a happy guy because that means I can get rich. I’ll sell my house, sell my motorcycle and invest it all in an Economicus Accountus Maximus Profitus account then live the good life with more than 100% profit annually.
Just for the fun of it, I researched how much profit a Wall Street hedge fund makes every year. According to Barron’s Best 100 Hedge Funds, the top dog made 44.84% annual return in 2015 and “only” 29.94% annual return over a three-year compound. No other hedge fund made more than that according to this information – may be the big boys on Wall Street have access to other types of information but this is all I’ve got. These hedge funds control millions and even billions of dollars, so I believe their traders and the algorithms they use are far better than what you can find on a shady, unregulated binary brokerage. Sorry, but I just don’t see a binary broker making more than 100% per year when the best hedge funds on Wall Street make 40%.
Conclusion: Should You Open A Binary Options Savings Account?
Most of you know that your winnings come out of the broker’s pocket, most of you know that it’s incredibly difficult to get your money out of some brokerages but now they go a step further and tell me they will “guarantee” my investment, they will double it every year… pfff, come on! What’s next? Is beer pouring out instead of tap water? That would be cool, but although that’s very improbable, I still think it’s more likely to happen than people making money consistently with a binary Savings Account or Fixed Income Account, or whatever they wanna call it.