For the past few days we have seem a surge in spam advertising the traderush.com web site.
This appears to be a binary option trading web site, but in fact it may be much worse than that.
Binary option trading is a scam that has been around for a few years. It’s a way of betting which way some financial indicator will move over the next few minutes, in which the odds are stacked in favor of the house. For each $100 bet with a typical ‘broker’, if the market goes in the direction you projected you make $75, and if it goes the other way you lose $85.
While savvy traders may be able to project which way the dollar to euro exchange rate will move over the next few weeks, there is so much noise in the process that there is no way to predict which way it will move in the next minute. You are betting on a 50/50 chance, so on average you will lose $85 as often as you win $75. Your expected return on each bet is 95%. This is about the same as betting red in Las Vegas on a roulette wheel with two zeroes. Did you ever meet anyone who made a bundle betting red on roulette over and over again?
However, Traderush may be a lot worse than this as it appears the whole game is rigged. There is a minimum deposit of $250 required to open an account. Minutes after placing this, customers report getting a phone call offering them an extra $750 credit if they will make a $1,000 deposit. Typically, users report that initially they make money for three days, but after that time, most of the bets they make lose until all their money is gone. One user reported that two different exchange rates apparently had the same graphs in Traderush, and another that the Traderush graphs did not match a genuine feed he was getting from the financial markets. This suggests that Traderush is not based on genuine market movements, but on fake financial data which tricks the user into believing they can make money, but them makes them lose it all.
What if you try to withdraw money from your account while you are ahead? Customers report extreme difficulty with this. It seems that once Traderush has your money they will never let go.
While we don’t know for certain that Traderush is an entirely fraudulent operation, we do know that they are violating the US CAN-SPAM law by sending bulk email without an unsubscribe option or a postal email address. One amusing thing about their spam is that it actually looks like pump and dump stock spam. Here are some typical subject lines:
Tremendous Momentum, Investors are Accumulating!
Can this company break its weak resistance and blow up the charts?
This Company Should Be On The Top Of Your Watchlist This Morning; Important Details Insid (sic)
This Stock is Ready to Roll!
This Stock could rally in a recession!
It’s a little strange that one sort of scam should masquerade as another sort of scam, but perhaps they have worked out that only people gullible enough to fall for pump and dumps would be interested in their sort of ‘trading’.
Binary option spam is not limited to the English-speaking world. We’ve recently also seen Russian spam promoting binary option web sites including the ones below:
Let’s hope that Russian law enforcement are more effective at dealing with spam and scams directed at Russians than they are at dealing with Russian criminals who are targeting the rest of the world.