The way Honest HYIP are Making Money Online

Updated: 09/10/2005 15:54
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One of the most interesting and always actual questions that bother investors is of course the rhetorical one: "where do they get such an income?" We have already answered this question in one of the previous issues, however then we explained HOW do they get such a high interest. Today we would like to tell you about the sources of this interest.


Namely – about the financial markets, where traders (HYIP admins) carry out transactions. I guess everyone must have heard that these are FOREX, stocks, futures, though not even every experienced investor realizes exactly what that is. In this article we are going to make a short review of the trader' spheres of activity, which will give you an opportunity to comprehend deeply the specificity of the market and possibly to come to know the particulars of the fine points that will allow you becoming a real professional. :)

So, to start with let's give the general idea of the sphere we are all involved into. HYIP exists. This is the sphere of high yield programs that bring high income to their investors and sometimes – lost hopes. The activity of such programs is practically not regulated in the Internet, so everything is based on the trust.

This "pure trust" most often implies that HYIP is a trader (o? a group of traders), who can make high income from your money. Much higher than offered in a bank. Some admins reinvest their funds to other HYIP, some of them go in for betting. Some are not afraid to write the word FOREX on their site, though more often there's just a general word there: "investment opportunities".

These two words actually mean rather limited circle of the tools, known to every investor and we'd like to tell you about them in a couple of words.

First of all we'll touch upon the FOReign EXchange operations market, in abbreviated form – FOREX. The market was originated in 1971 (nominally) that consists of currencies' exchange transactions. I.e. one currency is exchanged to another.

Till 1971 it was impossible, because all the states regulated the course of their national currency independently in respect of US dollar, which in its turn fully corresponded to the cost of… gold. 35$ for one troy ounce of gold. Though this tie was removed later on and the rate became free, it became regulated by the demand and supply only.

The participants of this market are banks, private operators, financial institutions, various funds and brokerage companies. They all participate in the market, not concerned with distance and time. Every "day" of the market starts in New Zealand and moves with the time zones, finishing in New York and Los Angeles, having from two to three million dollars in turnover every day. The market "unity" is provided with various informational means, and banks are "material" participants, in the upshot they provide for the money itself and the financial transactions to transfer it.

So, money is traded on FOREX. 24 hours a day, Monday to Friday. Where is the income made? "Spread" – difference between currencies secures income. You purchase 1000000 dollars for one amount, and in a minute you sell them for another – the rest is yours. The amounts allowing completing the transactions on FOREX market – from one million dollars.

That's why traders need HYIP. Though of course it can't get the million. It's true, though they can to a bank or a brokerage firm, dealing with providing "access" to the market as the result of so called "margin" principle, when for some amount (for instance from 10 000 USD),you get an opportunity to process transactions with the amount of 100 000 USD and more.

So, it is clear what the market is. Market operators constantly sell and buy currencies. No commission markets, no amounts restrictions. The spread is sometimes so huge that trader can make up to 50% (and sometimes even more) from the amount invested daily! And it's totally real. This allows successful traders providing such income. But, only some of them and… only the professionals.

The precious metal market (commodities), the second popular in HYIP. As you might have already guessed, the primary good here is a precious metal. Investing funds to the market of precious metals allows making profit from the quotations of the prices' on precious metals, since precious metals can always be exchanged into money.

Investor can locate the precious metals at his disposal on the deposits in the banks and using the "metallic" deposits gets obtains credit for realizing other purposes. When the price for the precious metals deposited growth, investor's property increases, and incomes got from the credit multiply his capital. Though, we talk about first-hand transactions, connected with the market. And as you have already guessed, here it's all about analogous purchases and selling of the precious metals, and the profit is from the margin.

The third popular market, using your money is the Stocks market, another name is the securities market. The goods on this market are the companies' stocks. Investing to the stocks of this or that company investor gets right to getting his portion of the profit from the company's profit – dividends (in case the company is successful).

In such a way, the stocks investment yield has two components – dividend and margin between the purchasing price and current price of the stock. The stocks trade is realized on such regional exchanges as New York stock exchange, Tokyo stock exchange, Frankfort stock exchange, London stock exchange etc.

In this case you will hardly connect your income with daily payouts (in any case – high ones), because the market reactionary character is much slower, though the sane effective. Again serious amounts are needed to purchase the stocks and not every talented and clever person can easily spend this money.

Also another famous name is futures. This is the market whose article are different kinds of contracts to supply a certain type of goods within the terms agreed as well as the derivative from the financial tools of these contracts. The source of income is changing the market price for the good, whose supply is provided by the contracts. The purchase and sale deals of that sort of assets are arranged on the specialized commodity exchanges.

And finally, the ultimate market of state treasury obligations (fixed incomes). The market is extremely "slow", though it's much more serious and important. Though it can't be compared to HYIP. If you come across something like that, most likely it's a scam.

The goods on this market are treasury obligations, issued by the corresponding state institutions of the countries, as a rule state treasuries and Ministries of Finances. The attractiveness of this market for investors is that these obligations are secured by the property of the state (land, bowels, riches, gold and exchange currency reserves, state property etc.) and possibility to lose the investments deposited to this depends only on the financially economical state.

The yield fm these securities is determined by the market and the monetary management of the country given. As a rule the yield depends on the maturity date and the current discount rate in the country. Usually the yield from the treasury obligations is about 2-5% annually. Treasury obligations are issued with different maturity date – 3 months, 6 months, 1 year, 2 years, 3 years, 5 years, 10 years, 15 years, 30 years etc. Namely from here the word Bonds came to HYIP – some treasury papers are called like that. But as you can see the percent is not good for us at all.

We'll probably get back to this theme in future, though we can't go deep into the specific character of the markets, because it will take much time and will hardly become useful for us, if you work on HYIP. Good luck to you, we advice you to be on your guard as usually. Providing this article we gave you another couple of trumps to fight the scam.


About the author

Eric Marriam is a young writer. Even though he is not experienced he is able to make really high quality work. Eric is able to identify a problem people have and break it down, able to appeal to emotion through emotive writing, can change style of writing to cater to different audience. Eric Marriam is able to work creatively and effectively with staff and managers and despite his young age, he proved to be a clear and effective writer and speaker, committed to maintaining quality and efficiency, seeking for professional growth and development.
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