Avoiding Stock Option Trading Information Fraud

Anyone playing the stock market is going to be a target for scammers because you will be perceived as having a lot of money to steal. Scammers often lurk in online trading forums or manage to send out spam phishing for your personal data. They spam will contain malware (malignant software) or a link to a legitimate looking site that will ask you to enter your personal information. But there are also other ways scammers can try to pull stock option trading information scams.

Backdating

This is one of the more common ways employees try to gain more money from their stock options. Employees are given a certain amount of time to buy a stock in the company they work for. This price is fixed according to dates, though. They merely backdate their stocks to a time where they can get more money. This kind of stock option trading information scam stays inside a company.

"Greed Is Good"

Remember the Michael Douglas hit movie from the 1980's, "Wall Street?" His character got filthy rich from insider trading, which can also be done with stock option trading information. When you buy and sell stock inside your company AND report it to the SEC (Securities Exchange Commission), this is legal. If you don’t, then you're in trouble. Insider trading scams also involve giving secrets about the company to stock brokers in an attempt to manipulate the stock market.

Scam Giveaways

Although many individual traders are becoming educated on how to spot a stock option trading information scam from an email, web site or posting on a forum or chat room, there are still thousand of people scammed every year. Some dead giveaways that what you are reading is just another stock option trading scam is when:

The poster uses poor grammar, spelling and capitalization The poster will not give a full name The company to invest in is overseas The deal sounds too good to be true You are guaranteed to see profit

One way of being sure you don’t fall victim to stock option trading information scams is to check on the SEC's website to see if the company is registered with them. Even foreign companies are required to register with the SEC if they want to sell stock options to American investors. You could also call any phone number you are given just to see if it is actually a working phone number.