Police are warning investors to be aware of a high-risk opportunity for big financial returns which are not regulated and could lead to huge losses.
Binary options are a relatively new investment tool which are attracting interest and involves traders effectively betting on whether the price of stock will rise or fall – and if predicted correctly, could land a handsome pay off.
Although legal, they are not regulated by a regulatory body, including the Financial Conduct Authority or the Gambling Commission, which makes it difficult to tell if someone is a legitimate trader or not.
Nottinghamshire Police has said there has been an increase in people losing money to criminals offering binary options.
A spokesman said: “Victims, who are often elderly or vulnerable, receive unsolicited phone calls or email messages offering very attractive returns for money invested in binary options and can even get details of bets made and see their money grow.
“However, these profits are not real and once enough money has been obtained the criminals will disappear leaving victims with nothing.
“Traders can choose various commodities to trade in such as gold, oil or stocks.
“You could bet at 2pm that the value of gold will either increase or decrease in price by 2.05pm.
“You are not buying or selling the gold, just predicting whether the price of it will rise or fall.”
People are being advised not to invest with any person or organisation that is not registered with the FCA.
This can be checked online at https://register.fca.org.uk/