In this day and age of compromised data and low online security, few people look forward to revealing stuff about them, even if it is a mere wealth check, which some binary options brokers are required to perform. Other brokers may still choose to do so, although it is interesting to see how this will affect their profit margin. One of the things that made the Internet so great was its relative freedom and discretion it used to provide for its users. Nowadays, people are so freaked out by online security, they require you to leave all sorts of personal information, to “ensure safety”. But that only works for them, and you’re the one getting exposed, right? Sadly, when it comes to making money, and that is what binary options are all about, some privacy may need to be sacrificed, from time to time.
How wealth check looks?
The most common way is a questionnaire, inquiring into your economic background and status. Now, some brokers are required to perform it, especially if they are regulated, but they also need to make money – and there lies the dilemma. On one hand, you have a client willing to trade, and you don’t want to turn him down. On the other, you have regulations that have to be enforced, and sometimes a would-be client simply cannot afford to trade. It is arguably better to turn such people down outright than to make their financial situation even worse. These questions are also meant to test if the client understands the risks they are about to assume. The main assumption is that these questions are here to protect clients first and brokers second. You could, theoretically, answer these questions however you wish, even get ‘creative’ on certain subjects, but by doing so, you automatically absolve your broker from any liability concerning your transactions. It is considered that the broker did everything in his or her power to protect your interests.
How likely am I to be subjected to one of these?
Actually, very few brokers these days are regulated, and even some of those opted not to go through with wealth check, denouncing them as either redundant and/or invasive, making them prone to abuse. However, it might not be a bad idea for you to take a proactive approach. You could perform wealth check on yourself, anonymously, in order to make sure your finances are able to withstand your trading habits, whether in terms of binary options, or Forex, or Bitcoin or any other market. This might give you a better grasp on your financial state. These questions might even help you figure out your goals and decide on the optimal strategy to achieve them. Binary options are great, but they are not for everyone. If you are one of those people, it might behoove you to find out the easy way, rather than lead yourself to financial ruination.