Obama Binary Options, and their shell websites, also offers pair trading.
With pair binary options you are betting which of two stocks will perform best over a duration of time (e.g., 1 minute, 5 minutes, 3 days, 1 year). En example would be that you choice the pair of Google and Microsoft with the prediction that the price of Google will outperform that of Microsoft over the course of the time segment that you have chosen. At the closure of the time segment the relative performance of each pair is measured. In this instance you would win your investment (a large, and predetermined before you bet, percentage of your bet money) if Google had outperformed.
Binary Options and Binary Pair Options available on the websites run by Obama Binary Options are non exchange-traded binary options, which are defined by Wikipedia as:
Binary options contracts have long been available over-the-counter (OTC), i.e. sold directly by the issuer to the buyer. They were generally considered “exotic” instruments and there was no liquid market for trading these instruments between their issuance and expiration. They were often seen embedded in more complex option contracts.
Since mid-2008 binary options websites called binary option trading platforms have been offering a simplified version of exchange-traded binary options. It is estimated that around 90 such platforms (including white label products) have been in operation as of January 2012, offering options on some 200 underlying assets.
The platforms offer standardized short-term binary options with a pre-determined profit/loss, that cannot be liquidated (buy or sell to close) before expiry, unless the platform or broker allow such liquidation.
The US Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have issued a joint warning to American investors regarding unregulated binary options.
The platforms do not charge fees from their investors.
So how do they make money? A legitimate binary options platform or broker might use the following formula (but scam brokers like Obama Binary Options DO NOT, they just pocket your deposit and typically, even if you do win after their misleading ‘brokers’ talk you into bad bets, don’t allow customers to withdraw funds):
Their profit comes from the difference between the options that expire in the money to options that expire out of the money. This difference can be found by the formula below. In this (for each base asset with same expiry characteristics), (W) is the in the money option payout in percentage terms (e.g. 1.7), (L) is the out of the money option payout in percentage terms (e.g. 0.15), 
are the turnovers of transactions made for each outcome (e.g. $1,000), (S) is the platform’s gain.
![S = -[V_{1}(W-1)+V_{2}(L-1)]](http://upload.wikimedia.org/math/3/3/6/336d1f51e529dbc96b6feb836daceeff.png)
In this example the platform’s turnover is $2,000 and its profit is $150 or 7.5% on turnover. As the platform’s gain comes from the above formula, most platforms will be indifferent as to the outcome of a single trade. Note that if 
is not equal to 
then the platform will have to act as a market maker. This can cause the platform gain (S) to be more volatile than in the above formula. In order for a trader to make a long term profit he has to predict correctly roughly 54.5% of the time (depending on in-the-money and out-of-the money payouts).
Even if you do win your bet or prediction (or ‘trade’ if you still want to call it that) you typically cannot withdraw your winnings, or original deposit, (outside of a credit card charge back) from the websites run by Obama Binary Options.
Obama Binary Options also effectively avoids, or combats, credit card charge backs by requiring the customer to email them a scan of the following when making a deposit of $1000 and upwards:
1. drivers license
2. credit card – front and back of credit card (middle group of numbers blacked out, and security code blacked out)
3. utility bill with same billing address
4. email stating that they give the company permission to accept their deposit for trading
It becomes somewhat difficult to convince the credit card company that the charge was not valid when you’ve provided the company with everything but your long form birth certificate.
It should also be noted that the ‘brokers’ (they are not brokers) use misleading and high pressure tactics to influence customers to make large deposits and bad ‘trades’ (bets). Is that illegal? Of course it is, here as example:
Fast living trio of British boiler room fraudsters – Paul Gunter, Richard Pope and Simon Odoni.
Stay tuned for report #4 on Obama Binary Options.
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WOW! GREAT REPORT
Essence of the SCAM:
It’s amazing to me how they could find ANYONE who would wish to participate in this scam.
It appears to have essentially ZERO RISK to the site owners (unless, of course, they get arrested and convicted for the scam) but EXTREMELY HIGH RISK FOR THE PARTICIPANT!
Bruce wrote:
Just like Smith/Steadman scam.
Binary Pair Options:
Bruce said
Goddammit! There goes another perfectly good irony meter. I am gonna make you pay me for that one Bruce.
FOR COMPARISON PURPOSES TO THE ‘OBAMA BINARY OPTIONS’ SCAM COMPANY
I believe (?) the below described company, ‘EZTrader’, is an example of a regulated, legitimate, though still very risky, non exchange-traded, binary options trading platform.
http://www.eztrader.com/Home.aspx
Note that the services of EZTrader can currently be used in the Dominican Republic, Cyprus, the United States Minor Outlying Islands, and a great many counties worldwide, but NOT on the U.S.A. Mainland.
Regarding withdrawal of funds from EZTrader, they claim:
See also the following regarding withdrawals:
http://www.eztrader.com/en/banking/
The general functions (partial) of the EZTrader customer trading interface can be viewed live at:
http://www.eztrader.com/en/Trade.aspx
———————————————
From Wikipedia, regarding even ‘legitimate’ binary option trading:
https://en.wikipedia.org/wiki/Binary_option
Based on my brief examination of the information given in the below-linked Wikipedia article, I believe placing a bet on a ‘legitimate’ standard binary options trade is quite similar to placing an ‘Outside, Red or Black’ bet on a roulette table.
https://en.wikipedia.org/wiki/Roulette
The PAYOUT on a winning ‘Red or Black’ bet in ROULETTE is typically 100%, with the odds against winning 19 to 18 (French) or 1.111 to 1 (American).
The payout for a comparable ‘Put or Call’ bet on a short term (eg. minutes or perhaps hours) ‘legitimate’ STANDARD BINARY OPTIONS TRADE seems to be in the general range of only 60% to 80%.
Reference: ‘FAQ – Advantages of Binary Options’
http://www.eztrader.com/en/Faq.aspx
I haven’t viewed any comprehensive data regarding the odds against ‘winning’ a bet on Binary Options’ However, I suspect, based on the normal short term movements in the covered asset markets, the odds are reasonably close to those on a roulette wheel, and of course biased in favor of the house.
The following statement is from the Wikipedia article excerpted in Lucas’ report (Report #3):
http://www.wasobamaborninkenya.com/blog/obama-news/obama-binary-options-multi-million-dollar-fraud-report-3/
Based on the preceeding example, the odds AGAINST WINNING a ‘Binary Options’ bet appear to be about 1.075 to 1
It would seem, based on the above, if one wishes to lose one’s hard earned money LESS RAPIDLY (LOL), one should be playing ROULETTE rather than the ‘GAME’ of BINARY OPTION TRADING.
This assumes, of course, that one is dealing with a ‘legitimate’ Binary Options Trading company, which is NOT TO BE CONFUSED WITH A SCAM OUTFIT SUCH AS ‘OBAMA BINARY OPTIONS’