Rogue Traders Claim They Exploited a 60 Second Loophole in Binary Options
Rogue Traders Claim They Exploited a 60 Second Loophole in Binary OptionsDecember 16, 2012
I have recently enjoyed the company of some “basement traders” that have openly stated they were able to exploit a systematic weakness they found while executing 60 second trades with two very prominent and well-known binary options brokers.
At first I was very standoffish and reserved about these rogue methods as they force the broker to enforce rough policies that eventually hurt the average trader. However the more I hear about the scams going out there, the more I get receptive to these type of unorthodox make-money systems and methods.
Now, my friend Larry is a retired airline executive living off his 401K pension plan and a few bucks he was able to save due to the perks he received while working for Lufthansa in JFK. This guy sits down all day in front of two monitors, smokes his Cuban cigars, and analyzes candle stick pattern. He picked up this habit from a colleague of his that also retired and opened his own financial consulting firm.
Now, the system goes like this. At first he deposits a considerable amount of money, lets say $2,000, and proceeds to lose it intentionally while being very nice and quiet. This positions him as a “VIP” since he has built up a good reputation with the broker. Then he deposits double the amount after conducting the usual stock analysis and research. He tells the support rep that he has a system and he wants to check it out.
Once the trading on 60 seconds gets started it can either go up or down. If he believes he will expire in the money he does nothing except collect the cash and get out of dodge. If he believes its going to expire out of the money, he immediately advises the support rep that he had an error message “server communication error” and that he wants his money back.
Both times he did this he was able to get his credit card refunded after telling them he would immediately re-deposit after they solve it. Needless to say Larry moved on and used the same risk management system again with another broker.
Personally I have never found use for these systems since I try to stay on good terms with my brokers and use the more conventional strategies for making money and hedging my trades. However, the more I hear about new brokers entering the trading arena and the lack of regulation, the more I start to look at this as an opportunity rather than a way to scam brokers. I mean, they sure as hell have no problem taking your money, so you should feel perfectly fine using every available trick in the book to make sure your money is secure. As long as you are not violating any of the terms you should be OK, just be careful not to overdo it.