Everybody likes something that’s free and getting a bonus from your broker is no exception. However, the cynics and even the realists among us will tell you that you never get something for nothing and, although this isn’t always strictly true, you need to be aware of what is being offered.
Many brokers will give you an initial binary options bonus when you sign up for an account and make a first deposit. This may typically be 50% of the value of your first deposit so that, if you deposit $500 into your account, you’ll have $250 added giving you a total of $750 to trade. The stated aim of this bonus is that it helps you to get started and is an indication of the company’s gratitude that you’ve joined.
Restrictions on Withdrawals
There are always limitations with what you can do with this binary options bonus because otherwise you could clearly withdraw everything and just take your profit. To stop this happening, all binary options brokers will place a restriction on when withdrawal is allowed, which will typically be that you can’t make a withdrawal until you’ve traded an amount equal to thirty times the value of the bonus.
In the case of the $250 bonus, you’ll have to undertake trades valued at $7500 before you can withdraw anything at all. Of course, that doesn’t means you’ll lose that amount of money because you can have a mixture of winning and losing trades and will hope to profit overall. But you must at least risk that amount of money before you can withdraw anything, even your own deposit. If you choose to withdraw before reaching that level, you stand to lose all or part of your binary options bonus. Bonuses aren’t compulsory, however, so you can choose not to take one, trade only with your own money and withdraw as you wish without any restrictions.
An alternative to a bonus that is made available immediately as a percentage of your deposit (sometimes known as a cash bonus) is a pending bonus. This is also offered as a percentage of your deposit but the difference is that it isn’t available to trade until you’ve traded a stated volume of your own money (again, typically thirty times the bonus amount). However, the consequence of this is that there’s no restriction on withdrawals.
Normal Trading for Bonus Money
Despite the restrictions and limitations, binary options bonus money is added to the amount of money you have available and can be used to trade in binary options. However, just because it’s ‘free’ money, you must be careful you don’t use it irresponsibly. Used properly, bonus money allows you to make more trades than you would otherwise be able to do using only your own money and therefore gives you more time to become familiar with trading without risking too much. But this will only work if you trade normally.
Just because you have extra money available, don’t be tempted into making more trades or bigger trades and taking reckless gambles. If you do that, you’ll soon run out of money and the binary options bonuses will have been wasted. Instead, trade exactly as you would do if you were using only your own money. That way, you’ll learn how trading works, the bonus will last longer, you’ll be able to make extra trades and you’ll gain the experience to trade profitably. You’ll also find that you will quickly make the required amount of trades to be able to start withdrawing from your account.
In addition to the bonus provided in the initial deposit, many brokers also offer bonuses at other times. These may be made when significant financial events occur so that traders can take advantage of market volatility that may occur at those times by making extra trades. Additionally, binary options bonuses may be paid periodically to reward those who make frequent deposits into their accounts and trade regularly.
Bonuses are Optional
All these binary options bonuses have the same characteristics of being paid as a percentage of any deposit that you make. They also result in restrictions being placed so that you need to trade a volume that is a stated number of times the bonus value before being allowed to make any withdrawals or being given access to the bonus money. All bonuses are optional, however, so if you believe the restrictions are too onerous or you don’t want to be tempted into making extra and irresponsible trades, you don’t have to take them.
Free money is a big attraction and you may think that it’s worth signing up with a binary options broker the offers the highest level of bonus. However, this is only part of what a broker will provide and you should look at the whole package before making your choice.