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We recently received this question:

From Fuzz K.

Hello guys…

I’m a new subscriber to your service and decided to perform some additional due diligence in researching further into binary options trading.

Following your suggestions, I’ve followed up on the reputations for _______ and ______ {Binary Options brokers revealed within Wealth Vault Member Area}. I’ve got bad reviews from both of them by a seasoned 10-year veteran of binary options, and he explained in full details how binary options brokers make money, and how they profit off of their members making a losing bet.

Explained also was that the majority of these brokers are horrible at paying out, in fact delaying where they can, changing spreads, pushing bonuses just to keep you locked in, and a whole slew of other tactics.

The foreign, unregulated brokers are bad, and the only suggested brokers are ___________ for Americans, and ____________ for non-Americans. The reasons these two are seemingly legit is because they are on a commission structure, and regulated by CFTC.

Can you please research these two brokers and beta-test with them and give us your take, on behalf of your subscribers?

– –

Here is Brad’s in-depth response:

Welcome aboard Fuzz. My hat’s off to you for-digging deeper into the highly-speculative and sometimes shady world of binary options trading.

What’s important to understand though, is that most of what you’ll find on blogs, forums and YouTube arepeople’s subjective opinions, not objective facts… which is why I take a lot of what I read and hear on the internet with a grain of salt.

There are several nuances to binary option trading that many newbies aren’t aware of. So let me share some of the most relevant ones with you which will hopefully give you a broader and more balanced perspective.

To begin with, “offshore” European style binary options brokers (such as _____________, _____________, etc.) are by definition, like a casino. I use the casino analogy because they all pretty much work the same way.

If you go to Caesar’s Palace in Vegas and you play and win, you’re winning the house’s money. If you lose, you’re losing money to the house. The same is true with non-regulated binary options brokers.

However, even though you’re essentially playing in a ‘sandbox’ with them (since they’re not trading on a central exchange), the fact of the matter is, _____________ and its international counterpart, __________________, are not the only way to go for EVERYONE just because some self-professed 10-year veteran trader says so.

By the way, ________________ and ______________ are regulated trading exchanges and clearing houses, NOT brokers.

Professional gamblers have proven that the house can be beaten and that you can make money from them IF you know what you’re doing. That percentage is similar to winning in Forex, binary options, or any other market wherean average of 95% of the people lose their money and only 5% make money.

But we both know they didn’t build Caesar’s Palace or the MGM Grand because people consistently make money in casinos. Most people lose money in casinos AND trading… yet they still continue to gamble and play the markets.

The small percentage that make money are eithera)just lucky orb)understand gaming and mathematics really well.

If you can count cards, you can still make money at blackjack no matter what… well, as long as you don’t get caught by the casinos. ‘Cause they won’t let you play if you consistently beat ‘em over any length of time.
Let me tie this stuff into how it relates to non-regulated binary brokers…

Have you ever met anyone who would go into a casino, play a few hands of blackjack and win, and then go home right after?

Me neither…

Because what’s better than winning?…
Winning MORE!

In general, when people win, they play more. When they lose, they play more. The more they play, the more chances there are to lose… and most lose in the long run because they overtrade.

Binary brokers make their money on volume, which is why they don’t mind paying winners.

Plus, when the winners share their profitable experience with others, it attracts others to get open up brokerage accounts so they can get in the game too. As you’ve already learned, Fuzz, just like casinos,binary brokers don’t give anything away for free. Nobody gives anything away for free ― there’s an ulterior motive.

In our Binary Options vendor review inside The Wealth Vault, I cover how brokers’ terms and conditions work and the type of trading volume that’s required in order to qualify for the bonuses.We want members to go into it with eyes wide open, so they know what to expect if they choose to accept them.

Personally, I don’t like having any restrictions on withdrawing my money, so I avoid accepting any bonuses and free trade offers altogether.

And speaking of withdrawals, the main issue I’ve seen happen over and over is thatpeople naively sign up for the bonuses, then try to pull out their original investment and realize they can’t due to the terms and conditions they agreed to when they accepted the bonus.

That’s when people start slamming the brokers on forums. The truth is, the majority of binary options brokers operate professionally (including _____________ and ___________________, which we haven’t received member complaints about), but there’s been nothing stopping unscrupulous companies from swindling unsuspecting investors and traders.

This is about to change, though, as CySec, the financial regulatory agency of Cyprus, recently announced its intention to begin regulating binary options brokers who set up shop there.

Last year, CySec acknowledged that binary options trading should fall under the umbrella of the Markets in Financial Instruments Directive (MiFID). As a result of this ruling,CySec will be in charge of regulating binary options activitiesfrom now on.

The other important topic I want to address has to do with the whole appeal of trading European binary options in the first place:SIMPLICITY.

You only have TWO choices: it’s either up or down. When you go to a casino, you don’t have to think real hard about betting black or red on a roulette wheel.

If you had someone sitting on your shoulder (the Binary Options signals theoretically serve this purpose) telling you two out of three times whether it’s going to be red or black, that would be fine. But the problem is it’s not a simple UP/DOWN or PUT/CALL with _______ .

It’s an entirely different ball game with a MUCH steeper learning curve, requiring you to have to learn how to trade.

As a result, the complexity of the _____________ platform becomes a major obstacle for not only newbies, but for everyone else who’s looking for a quick, hassle-free money-making vehicle.

The point is, the average person isn’t going to be able to successfully trade binary options on ___________ without having somesignificant training under their belt first.

The other big difference with ____________ is that it doesn’t offer all the expiry times, nor does it offer all the assets you’ll find with non-regulated brokers. You can’t trade individual stocks on _____________, only indexes, commodities and currencies.

Here’s another thing: few people know it, but ___________’s datafeed isn’t their own. That’s right,they’re the exchange, yet they don’t even have control of the price feedthey provide to traders.

I spoke to ______________ the other day {the founder of Binary Options vendor we reviewed} and he said that his signals (as they currently exist) could potentially be adapted to trade on the _____________ platform.

He’s actually been trying to build a step-by-step system and signal service to make _________ simple for the average investor / trader for months. However, the challenge he’s running into is that he can’t tell you whether you should be buying an asset or selling it.

That’s because the strike price must be selected from contracts at strike levels determined by the exchange, not by you the trader.

For example, if you receive a Binary Options signal that says buy the EURUSD pair at 1.30004, if you look at the _____________ platform, it’s going to have a strike price of 1.30000 and another strike price of 1.30010.

So you’ve got a signal that’s between the strike prices. Do you buy the one below it, or do you sell the one above it, or vice versa?

Once you get a signal, what are you supposed to do with it? That’s the part that’s missing; hence, it can get very confusing for the average person who isn’t an experienced trader.

So while _________ offers a safer, regulated trading environment, it has a complicated platform that requires a serious learning curve to profit from.

The binary options industry is still in its infancy and it’s just a matter of time before things become more and more internationally regulated. It happened with forex and it will happen with binary options as well.

Although I haven’t been able to confirm it, I heard a rumor that the well-known forex broker, ___________ is going to take binary options worldwide.

The now defunct futures broker, ___________ was in the process of doing it and actually made a deal with ____________ before they went down, but the bottom line is, nothing can stop a money-growing idea whose time has come… andbinary options are hot right now.

Binary options certainly isn’t for everyone, especially those who are risk adverse… but I wanted to make sure you were givena more balanced view of the pros and cons that I think need to be taken into consideration. I hope I’ve accomplished that.

My best,