Avoid getting burnt by binary option scams

With a binary option, investors try to predict if the price of the underlying asset will be above or below a specified price at a specified point in time. It is difficult to make the correct prediction, especially when the time frame before the expiry of the binary option is short. It is very likely that they will not have time to change their prediction or resell their options once they invest. PHOTO: ISTOCKPHOTO

SINGAPORE: In recent months, the authorities here have issued warnings to investors on a practice known as binary option trading. It is a minefield for those hoping to make a quick buck, particularly when the trading is done via unregulated platforms.

The spate of warnings comes in the wake of a sharp rise in the number of complaints from investors who have suffered financial losses from such investments.

The Singapore Police Force said it has received more than 40 reports from investors, including finance executives and retirees, who have made complaints over losses in trading binary options. Together, they have lost more than US$1.7 million (S$2.4 million) to unregulated binary option trading platforms.