Bonus Incentives In Binary Options Trading
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With a binary options bonus, you can trade with extra money. Some brokers will give you a bonus without a deposit required first and you can start trading freely with it. But most give you a bonus as a percentage of your deposit added to your account (called a deposit match bonus). (And even those who offer it for free will still require you to make a deposit, among some other rules, before you can withdraw any money won).
Binary options brokers offer bonuses as an incentive to attract new people to trading on their platform (or entice old users who’ve drifted away to come back). These bonuses can come in several forms: from the deposit match bonus, or risk-free trades, to more complicated packages, technological gadgets, or extensive training help.
In this guide, we’ll list and compare bonuses and go over some of the most common types. You’ll get a better idea of the right time to take a bonus. We’ll also explore some key aspects to make sure that any bonus you want to take offers a real advantage to you.
Too often, however, bonus incentives in binary options turn into a headache and frustrate traders. So you’ll also discover some pitfalls to taking bonuses and why you might want to refrain instead.
Binary Option Bonus Types
When a trader decides to take a bonus on a binary options platform, they do so with the intention of using those additional funds to make more trades without parting with more of their money. Or they try to lessen their own personal losses should they suffer any.
Most brokers offer a welcome bonus (which they’ll sometimes call a sign-up offer) intended to persuade new traders to register with that particular brokerage company. In addition to deposit match, you’ll also see the following:
- No-Deposit Bonuses
- Risk-Free Trades
- Refer-a-Friend Bonuses
- Educational material or courses
Bonuses, particularly the monetary kind, always have certain terms and conditions you have to meet. In them, you’ll find the most important points for comparing bonuses. And these are where traders can often find themselves getting tripped up if they don’t read and fully understand the requirements.
Say for instance, that one broker offers a large bonus that really catches your eye. Another broker, however, offers you a smaller bonus that you might want to dismiss on sight. But the smaller bonus might come with no strings attached, whereas you’ll have to meet some very strict terms and conditions to get access to the larger bonus. So bigger isn’t always better in binary options bonus world.
You get rewarded this bonus when you recommend a friend who registers and makes a deposit with the broker site. Afterward, you either get a specific amount of money or a small percentage of whatever your friend deposited.
This type of bonus also comes with additional requirements or a higher turnover necessary to receive it. So before you accept it, make sure that you understand those terms clearly.
Deposit Match Welcome Bonuses
Brokers most commonly offer the deposit match as their welcome bonus. Let’s say you want to open an account as a new trader. Your first deposit triggers the release of the bonus offered as you request, which usually equals a percentage of the funds you deposit. Maybe the broker agrees to match 50% of your deposit. So if you funded $300 into the account, then the broker adds another $150. Now your total account equals $450.
No-Deposit Required Bonuses
This bonus clearly states what it’s all about. You get a bonus credited to your free account without needing to deposit any money. It sounds like a dream, right? With this type of bonus, you really need to read the terms and conditions because it can be a nightmare in disguise.
An account with a no-deposit bonus behaves essentially the same way as a free demo account, except you do get to make live trades with it. But you’re unlikely to meet the strict criteria necessary in order to withdraw funds used to win trades with that bonus money.
No-deposit bonuses typically require you to make a higher amount of trades (or a certain turnover threshold met) within a certain timeframe before you can withdraw any money…including any of your own funds deposited afterward! You can see high trade amount requirements like 200 trades needed. Or perhaps you’ll need to meet a high turnover rate, like trading 40 times the deposit bonus amount.
And a broker might also require you to deposit money before you can withdraw any winnings you’ve earned using the no-deposit bonus. Regardless, you could spend a long time trying to meet these demands and that’s assuming you don’t end up wiping out your account beforehand. In that situation, you’d have been better off not taking a bonus at all.
Despite seeming like the broker has an unfair advantage with this type of bonus offer, brokerage companies rarely offer no-deposit bonuses because they don’t actually work well for them either. So they’ve shifted away from this to offering risk-free trades instead.
Risk-free trades represent another and newer type of simple bonus that brokers offer. And what makes them intriguing to traders is their less-restrictive conditions.
With a risk-free trade, you have the opportunity to place up to a certain number of trades and not have money taken from your account due to the losing ones. If a risk-free trade you execute loses, then you lose nothing (as if you never made the trade to begin with). But if it wins, then the profit gets added to the funds in your account.
Typically, you’ll see offers of three or five risk-free trades. But the more trades you can take without risk, the more conditions you must meet. One risk-free trade may have a stipulation allowing a payout of cash available for immediate withdrawal. But numerous trade offers without risk can result in terms such as trading the winning amount a specific number of times before you can withdraw it.
Bonus Terms and Conditions
You’ll need to keep a look out for certain issues when doing your bonus comparison. You can find them somewhere within the broker website’s terms and condition. But we’ll list some of the ones to check for yourself when you read the small print.
- Restrictions on Withdrawals: Just about any bonus you take contains some withdrawal caveat. Turnover requirements are typically, and some come with a time limit restriction as well. More stringent terms come with larger sums of bonus money. For example, a $50 bonus offer may require you to trade $1,000 worth of money (equaling a 20x turnover rate).
- Deposit Lock-In: Some bonuses don’t allow you to withdraw any money until you meet all the terms. That includes your initial deposit as well as the bonus money. Of course, this puts you as a trader at a big disadvantage. While rarely offered anymore, some brokers still do. Avoid them at all costs!
- Bonus Payment Distribution: Some brokers combine the bonus with your deposit into one singular amount. Others, however, will separate bonus funds from your deposited money. The latter situation usually offers a better opportunity to meet all conditions and allow you to withdraw it.
- Risk-Free Winning Trade Payments: Do you receive any winnings from risk-free trades in the form of cash into your account? Or do these funds get added as bonus money instead (and usually with separate requirements necessary for access)?
Claiming Bonuses At the Right Time
If you think the right time to claim a bonus is always when making your first deposit, think again. With some brokers, you may want to reject any bonus offer and only deposit the minimum required to fund your account. This way, you can test out the platform with real trading. See how it goes before committing to their trading requirements for the long-term in an attempt to get everything the bonus has to offer.
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Then, after some time has passed, contact your broker and try to negotiate a more favorable bonus offer in exchange for making a larger deposit. The larger this deposit, the more open the broker will be to negotiating and therefore, the better the terms of fulfillment for you.
But perhaps you don’t want to go through all that hassle. If so, just stick to carefully researching the requirements necessary for any bonus offered. Ensure that you can comfortably fulfill them in line with your trading habits. Especially pay attention to turnover conditions and time restrictions for limits that need to be met.
Rejecting the Bonus Offer
Brokers like to persuade new traders to sign up and fund accounts with their company through the use of bonuses. And everyone wants free money, right? But with binary options, the money may not always come free.
So don’t feel obligated to take one just because they offer it to you. You can have several reasons for rejecting it. Below are just some of the reasons why that so-called free money may actually come with a price.
1) You’ll often come across broker websites offering $50, $100, even $200 for free when registering an account with them. Despite the promise of no payment needed, they still may force you to deposit money anyway to get access to the bonus money. And you’ll have to meet other requirements as well.
They may throw in an additional bonus too when you make that deposit, increasing the number or severity of conditions you must meet to withdraw the bonus(es). So make sure you understand what’s required of you before signing up. Contact the site for clarification if you need it.
2) Bonuses often increase the difficulty of withdrawing funds from your account. Shadier brokers will prevent you from taking out any money unless you meet their minimum trade limit. That includes not just the bonus or any deposit you’ve made but also any profits from winning trades using the bonus money.
And if you make a request to withdraw prior to meeting all their bonus terms, you might forfeit the bonus and any profits made with it. In fact, some sites state upfront that they won’t even give you the bonus money, just any profits made from trading with it after you meet all requirements.
3) Trade minimums for bonus access come with the territory but some are really high. It represents a certain dollar amount you must trade with before you can withdraw the bonus. Brokers use a formula to come up with this number. They usually base it on the amount of your initial deposit plus any bonus you’ve accepted. Therefore, if you deposited $400 and accepted a $100 bonus then $500 determines the minimum trade amount you’ll need to reach.
This minimum usually sits somewhere between 20 and 30 times the entire account value after the initial deposit. Some brokers, however, have it as low as 10 and as high as 40 or 50 times that. Meaning that an account with $500 must trade between $5,000 and $25,000 to access the bonus amount. And if you trade 1% of your account per trade, like most experts advise, then it could take you as many as 5,000 trades to qualify.
You can choose to trade bigger than 1% of your account, of course. But trading too big a percentage can lose you a ton of your money quickly.
Also, be careful when making your initial deposit. Brokers often apply them to accounts automatically when funded. So if you don’t want that, you’ll need to contact your account representative at the broker site and make another arrangement before giving them money.
4) Time Limits Necessary
Some deposit bonuses come with a time limit attached to them (usually 30-90 days). So you’ll have to reach the trade minimum necessary before time runs out in order to withdraw the bonus money. Imagine trying to trade thousands of times, up to thousands of dollars in a mere 90 days. You can easily feel forced into trading over your budget or breaking the rules of your trading system.
Of course, it could also inspire you to shoot for the moon, trading more aggressively (with larger amounts of money or more often) and putting greater risk on your account.
Looking for the Best Binary Options Bonus Offer
Finding the binary options platform with the best bonus offer for you comes down to researching each broker’s terms and conditions. And only you can determine if an offer suits you and your trading system.
A large bonus, while enticing, could end up being a waste of time and a source of frustration if you can’t meet their terms without risking your account. A small bonus with few or no requirements, however, can add a nice boost to your account without the headaches.
Any worthy broker will easily allow you to say no to a bonus. Some of them will even let you cancel the bonus while still in the process of meeting the requirements if you want. See any broker who attempts to force you into taking a bonus as a red flag. If it doesn’t suit your tastes, don’t take it.
Some binary options brokers like to offer bonuses to traders who’ve already deposited and traded with them as a reward. But those come with their own terms and conditions too.
These sites also continue incentivizing with bonuses upon sign-up or initial deposit because they know that your average trader will likely lose their money and quit before they can fulfill the terms. High minimum trade requirements and short time limits especially guarantee this. But each broker has different bonus rules so you should do your due diligence and read over them carefully.
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