Binary Options Bonus is the latest buz in forex world! Forex Bonus is everywhere! Almost all the brokers are providing bonus to the clients. Now-a-days, clients also look for bonuses to start safe trading. Binary brokers are no different! Almost all Binary Options brokers are offering incentives, bonuses, cashback offers and special promotions in order to attract more and more clients. Bonus is generally a good thing, however, Bonus and cashback offers are used by brokers to encourage first time clients to open an account for trading and as a reward for existing customers. Many of the incentive offers include a no deposit clause, so the investor does not have to put up any cash of their own for the duration of the trade. When the profit of the sale is calculated, the investor can withdraw the profit point’s amount from their account, but not the amount leveraged to them by the broker to take part in the trade. For cash return arrangements, they can function similar to a free transaction, but they also can be used to encourage investors to deposit more funds. For instance, a broker may offer a return of a certain percentage of deposit into a new account to encourage clients to hold multiple funding accounts.
What is Forex Bonus
Bonus and cashback offers are used by brokers to encourage first time clients to open an account for trading and as a reward for existing customers. Many of the incentive offers include a no deposit clause, so the investor does not have to put up any cash of their own for the duration of the trade. When the profit of the sale is calculated, the investor can withdraw the profit point’s amount from their account, but not the amount leveraged to them by the broker to take part in the trade. For cash return arrangements, they can function similar to a free transaction, but they also can be used to encourage investors to deposit more funds. For instance, a broker may offer a return of a certain percentage of deposit into a new account to encourage clients to hold multiple funding accounts.
What is a Binary Options Bonus ?
Binary Options Bonus is the money given by the option brokers to trade in binary option. Bonuses and other promotions are a great boost for getting you started. For example, one could invest $200 in order to receive up to a $600 bonus to his account (That’s a 200% bonus). The average bonus is about 50% to 100%. Most brokers will provide it as Credit. They will deposit the bonus money into your account immediately after you’ve completed your initial deposit amount. That’s a great boost for your account, but don’t get carried away since it’s not as simple as it looks.
Types of Bonus
It’s simple. You will deposit money and the broker will provide a percentage of your money as credit. You have to complete certain rules and regulation to transfer the credit to your main balance and make it withdrawable.
Here are some of the sites where you will find news on latest deposit bonuses in Binary option:
Bonus without Deposit?
Well, it may seem harsh to you, but the truth is there’s no such thing as free gift. If you’ve been offered a non-deposit Binary Options Bonus, be aware that in order to withdraw your bonus and profits you might need to deposit more balance into your account and comply with wager rules. But, as you want to begin your trade with a unknown broker, you may go for a no deposit bonus to taste the trading conditions of the brokers.
Take your time to review the no deposit bonuses offered by option brokers:
Some brokers will pay you for bringing them new traders, go ahead and refer a friend to sign up with your favorite broker and get paid. Actually, brokers will not only pay you, but your friend gets a piece of the cake too. Hey, you can always share the wealth! 40-60, 50-50 or whatever makes you happy. This is a nice bonus too, but as always, don’t forget to ask/read the terms & conditions first as they are usually very similar to deposit-bonuses.
Another way of reaching success quicker and easier is making yourself extra special by becoming a VIP-member! The perks you’ll get differ from broker to broker and you can use them in different ways. Brokers and us traders both have something in common, we both love money! This is why many brokers offer different types of VIP-accounts depending on the size of your deposit. The bigger the deposit, the more perks and assistance is awaiting. For example, higher returns that will increase your chances of making profits, valuable e-books that you can learn from, personal 1-on-1 training with a professional trader and free withdrawals are a few of the benefits of being a VIP-trader. Obviously you can have a VIP-account with a deposit-bonus too! So go ahead and combine them, why not practice on your bonus account, while you get trained by your own personal account manager, save money on making free withdrawals and earn higher returns. See, now you’re ahead of everyone else, taking advantage of all of the extra benefits.
Some brokers offer out of the ordinary bonuses which are often limited time offers or rare occurrences. For example, Zone Options had a limited time offer called “Double your profits”. During the promotion period, if the participant made 10 trades of equal amounts, the broker would double the profits obtained from the successful trades. The same broker offers First Trade Risk Free: the trader can get his money back on the first trade if it expired Out of the Money. Special conditions apply to this kind of bonuses and they are rarely seen, like I mentioned before, but keep your eyes open because the next special bonus may be just around the corner.
This bonus has no direct connection to money. You will receive a free e-book or access to a webinar upon your first deposit. I said it has no direct connection to money because obviously you don’t receive any money but if the educational material received is good, it will make you money in the future.
Who should take bonus
Usually forex Binary Options Bonus promotions are aimed at new traders, or traders with low capital typically depositing $5000 or less, often $1000 or less. If you have a $1000 account, even with leverage it’s going to take most traders (who aren’t full-time) a long time to trade $2,000,000 in order to withdraw (their own funds and) their $200 bonus, as in our example above.
If you manage your risk and don’t risk more than 1% of your account balance on any one trade, on a $1000 account ($1200 with the bonus) that means you can risk $12 per trade. If trading a mini lot, that means you need to take trades with a 12 pip risk or less (difference between entry price and stop). You need to make 200 such trades in order to make that bonus yours. At one trade a day, that takes nearly a full calendar year. Making a trade every other day means two calendar years of trading before that bonus is yours. What if you want to make a withdrawal in that time?
But what if you see a trade and the strategy requires about a 24 pip stop loss? Well then you can only trade a half a mini lot (5 micro lots) in order to keep your risk below 1%. So now it takes you twice as long to make that bonus yours. Trading every other day in this fashion means that $200 is yours after about 4 years.
Not quite as glamorous as it sounded in the ad, is it?
Now if you open an account for $10,000 and get a $200 Binary Options Bonus it works a bit better. Because you have a lot more of your own capital, you can take larger positions, and still keep your risk per trade under 1%. You attain your bonus much quicker, likely within a matter of months. But most traders who are taking this bonus aren’t depositing $5,000 or $10,000, they’re depositing $100 to $1000. If you take a $200 forex bonus on a $200 deposit you’ll likely never be able to withdraw your money. It’ll take you so long to trade the necessary $2,000,000 in currency that the learning curve in trading will have already eaten through the deposit.
So if you deposit more than a bonus is good? No!
Which brokers provide bonus
Given all the information above, you’re likely now seeing that a Binary Options Bonus is actually a bit of a scam. Not a fraudulent one, but more of an ethical grey area. Every broker that offers a forex bonus knows the above stats, and that most traders will never get to withdraw the bonus. On top of this, by providing the forex bonus the forex broker is assured that the trader can’t withdraw funds and is thus forced to trade with them until they become profitable, attain the full bonus or lose all their capital.
Not all forex brokers that offer cash bonuses are bad (nor is the above statement recommending those brokers)! There are likely a lot of brokers out there which are quite reputable, but that offer a cash bonus which may result in you not being able to withdraw your funds. Read the fine print and be suspicious of free “carrots” dangled in front you.
You must understand the legal conditions
Here are some of the legal conditions you may face while taking bonus:
- The company reserves the right to cancel the Binary Options Bonus without prior warning, so we strongly recommend refraining from use of bonus funds in developing your trading strategy. The company is not responsible for any consequences of bonus cancellation, including stop out, because the bonus is the ownership of the company until the customer earns it by completing trades of the total volume specified in the clause [X]of the present agreement.
- If volume requirements are not met and the equity of the account goes below the bonus amount then the bonus is removed automatically by the system. In other words, if the Cash Equity (Equity – Credit Bonus) becomes zero or less, all previously awarded Credit Bonuses will be canceled and withdrawn from the respective Client’s account. In these circumstances the Company shall not be liable for any consequences of the bonus cancellation, including, but not limited to, order(s) closure by Stop Out.
You can see that the bonus money isn’t free, and if you don’t do well that “free money” is going to be taken away. While wording of terms vary from broker to broker, the underlying tone is the same: you face potential complications by accepting the bonus, it takes a lot of successful trading for that bonus to become yours, there’s no actual free money and it’s not going to be there for you when you actually need it.
Do not embrace the hugging arms of large Binary Options Bonus givers and stick to brokers who offer low bonuses but yet still offer a considerable amount in accordance with the initial deposit. To summarize, the bonus is always a great boost in the beginning, but it still has to be proportional to the initial deposit. One more important consideration – Don’t be afraid you’ll never meet out the minimum demands. The bonus is there to help you begin, but it doesn’t cover your losses. Use the prize money to trade smartly, using the bonus with care could really boost up your profits.