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DEFINITION TRADING BINARY BONUS
Binary Option Bonus are not something new, as they are one of the most popular ways for binary option brokers to entice not only new customers to sign up and trade but also, in some cases, are used as an incentive to encourage traders to make additional deposits. While bonuses in binary option might seem enticing, if a trader does not understand the generic terms for the bonuses that are offered, chances are that it could prove to be a risky gambit. In fact, most of the complaints against binary option brokers are largely attributed to the trader misunderstanding the bonus terms and conditions.
If you are a binary option’s trader and feel that you are ready to open a live trading account and want to claim the bonuses offered, then, it is in your best interests to read this article to understand the various bonuses that are offered by binary option brokers and what they really mean for you as a trader.
TYPES OF BINARY OPTION BONUSES
While the binary option bonuses go by different names, they are broadly classified into the following categories.
1-Deposit Bonus (or First Time Deposit Bonus or Sign Up Bonus or Welcome Bonus)
2-Reload Bonus (applicable for traders making a second or more deposits)
3-Risk Free Trading Bonus
4-No Deposit Trading Bonus
The deposit bonuses are usually offered to first time customers. Meaning that, you don’t have a previous trading account with the binary option broker. The deposit bonuses vary from one binary option broker to another, but the typical average deposit bonus that is offered is around 25% – 50% (In some cases, a few brokers offer as much as up to 100% deposit bonus).
This means that when you deposit $100, the broker gives you an additional bonus of $25 (for a 25% bonus) or $50 (for a 50% bonus). This bonus would then bring your grand account total to $125 or $150.
The reload bonuses are generally offered to traders who make second deposit or more into their trading account. The reload bonus works similar to deposit bonuses and varies from one broker to another as well as the deposit method used. For example it is common to see binary option brokers offer ‘Reload Bonuses’ to traders who deposit funds via eWallets such as Skrill/Moneybookers or Neteller.
3-RISK FREE TRADING.
Trading bonuses under the ‘Risk Free’ category work differently. Instead of offering you the bonus upfront, binary option brokers use this type of bonus to offer you ’insurance.’ For example, if you get a $50 risk free bonus, it simply means that your losses up to $50 are covered by the broker. Of course, there are other variations which make it a bit more complex. For example, some brokers also have a criterion of a limited number of trades. Meaning that, a risk free bonus is offered only if you lose $50 within the first three trades. (But if you do not lose any money on the first three trades but lose on the fourth trade, the Risk free bonus becomes void).
4-NO DEPOSIT BONUSES
The no-deposit bonuses are offered by a few binary option brokers. Such bonuses, as the name explains is a bonus that is offered for free. To claim the binary option bonus without deposit, traders simply need to create an account with the binary option broker (in some cases verify their accounts via SMS verification for phone number and updating with proof of ID and address). Once the account is verified, traders then get a no deposit bonus, which varies from one broker to another. The bonus can be used without having to make any deposit and can be traded. However any profits generated via the no-deposit bonus cannot be withdrawn unless a deposit is made or in some instances a high trading turnover volume is met.
BINARY OPTION BONUSES – GENERAL TERMS
The general terms governing the bonus terms are for a trader to meet a minimum trading turnover requirement. This typically ranges from 10 – 40 times the bonus amount. The best way to illustrate this is with an example:
Trader A deposits $100 and claims a 50% bonus.
This brings his total account equity to $150
The trader is required to meet a trading turnover of 20 times the bonus amount before they can request a withdrawal
Trader A, therefore needs to meet a trading turnover of 20 x $50 = $1000 in trading turnover
Assuming that trader A risks $20 for every trade they make, they need to trade 50 times in order to meet the $1000 turnover criteria.
INSTANT BONUS vs RELEASE BONUS
The above bonus types can also fall into one of the two categories. The table below gives a quick comparison and the pros and cons.
Released instantly to your trading account
If a trader requests a withdrawal without meeting the trading criteria, the profits + the bonus is canceled
Best used for professional or experienced traders.
Released at regular intervals ‘after’ the trading volumes are met
Trader can request withdrawal without any restrictions including the profits. Only the bonus is canceled
Ideal for beginner traders.
SHOULD YOU USE THE BONUSES?
While there are pros and cons regarding whether you should use a bonus or not, it is up to the trader to decide if they want to use the bonus. Most binary option brokers now-a-days require traders to request for a sign up bonus. This ensures that the trader requesting the bonus understands the terms and conditions. Some traders prefer to use the bonuses in order to increase their account equity which gives them a better chance to make more profits, while some traders simply prefer not to make use of such or any of the bonuses. If you are considering using a bonus from your binary option broker, take some time out to read through the terms and conditions before.
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