The Wolves of Tel Aviv: Israel’s vast, amoral binary options scam exposed | Hacker News Reader

The Wolves of Tel Aviv: Israel’s vast, amoral binary options scam exposed

timesofisrael.com

27 pointssaycheese5 comments

This is the second article in a week I've seen on binary options. The earlier one I read called it a scam, but never described the scammy part. I mean, seems fair enough to me: financial instrument either hits the mark or it doesn't, if I think AAPL's going to hit $120 and my stock platform of choice says it did, pretty straight forward, right?

This articles takes pages to get to the point: the scammy part. But it gets there, and I'll save you the scrolling. That part above where I just look up AAPL on Yahoo! Finance? Yeah, that doesn't work because the "brokerage" has it's own algorithm, and (big surprise here) turns out NASDAQ might say AAPL hit $120, but the "brokerage"'s platform says, aw shucks, it only hit $119.84 that day. Tooooo bad.

That and, much like trying to unsubscribe from AOL, they'll block you on getting your money out of the account, complete with retention agents.

Even without that the house is against you. You can only win about 70% on a bet, but will always lose 100%

That's worse than the roulette.

I used to have a company like this as my clients. They got pretty irritated when I kept calling them a gambling app (they were not entirely above board. to say the least).

A call: "Wait, so no securities actually change hands? Or derivatives? What is the user buying exactly?"

Also, should that not be "immoral"? "Amoral" makes it seem like morals are not relevant to the description of the activity taking place.

A rock falling down a hill is amoral. Throwing a rock at someone's head is immoral (usually).

They are, of course, a gambling app. But so is a significant part of "investnemnt" activity.

Some instruments have more money playing with their futures an options than with the underlying assets. And more often than not in these cases, money changes hands but no securities. At the end of the day, it's all the same. These "gambling apps" have much worse probabilities, but the gambler's ruin is the same as in the main market, only faster.

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