Many traders complain about the binary options bonuses saying they are scams or not what they purport to be. It’s very important for traders to understand how the bonus works and and if and when bonus offers should actually be accepted. In a previous article I analyzed the potential benefits of the Binary Options No Deposit Bonus. In this article I will delve into the most common bonus which is the Binary Options Deposit Bonus.
Binary Options Deposit Bonus Limitations
On the surface deposit bonuses seem pretty straightforward. Deposit a certain amount and the broker adds a certain percentage to the deposit. For example, Redwood Options currently will offer a 50% initial deposit bonus. If you deposit $400 and agree to accept the bonus, they will deposit an additional $200 into your account. Sounds great, but there are strings attached. Most deposit bonuses have some or all of the following conditions:
- Trading losses initially come out of the money you deposit. Only ffter that money is depleted do you start trading the bonus funds.
- In order to make a withdrawal of the bonus or even your deposit you must trade a certain volume usually expressed in a trading multiple. The trading multiple can be anywhere from 4X – 50X the bonus + deposit amount. If the trading multiple were 20X and you start with a deposit+bonus of $1000 then you must make $20,000 worth of trades before you can withdraw funds.
- Once you accept the bonus offer and the bonus funds are entered into your account you cannot go back. You must then fulfill the conditions before you withdraw your funds.
The above conditions seem pretty strict and if you don’t read the terms and conditions (fine print) on the broker site you might be surprised to find out that they won’t let you withdraw your money unless you make a lot of trades. In fact many people become quite angry and cry scam. Brokers are walking a fine line here. On the one hand they advertise bonus offers to attract account depositors. Disclosing all the terms and conditions in their ads would take away from the attractiveness of the bonuses. On the other had the strict rules are important to brokers. They don’t want people to just shop around for bonus money and trade only with the bonus money. The question remains; with all the terms and conditions attached to the deposit bonuses does it make sense to ever accept a binary options deposit bonus offer?
What’s The Benefit of a Binary Options Deposit Bonus
If you are unsure about binary options trading or want to test out different brokers or trading strategies then a deposit bonus might not be such a good idea. You would want the flexibility to be able to withdraw your funds at any time if you feel that binary options are not for you or you want to try out a different broker. If you have a specific trading plan and have settled on a specific broker and want to invest a given amount of deposit money into binary options trading then it may make sense to take the best deposit bonus you can get. Take for example the Banc De Binary 100% deposit bonus offer. Let’s say you know you want to invest $500 to trade at Banc De Binary. If you don’t take the bonus you may lose your $500 after a bunch of trades. Chances are if you have a plan the more you trade the better you will be at implementing the plan a being successful. By taking the $500 bonus you are increasing the amount of trades and enhancing your ability to become profitable. The one drawback would be if you are making money before you reach your trading multiple and for whatever reason you want to withdraw your profits and move on, you would be locked in. As long as you know the restrictions before you agree to the bonus and have a trading plan associated with your deposit and the bonus it could be extremely valuable. I suggest that before you agree to take a deposit bonus make sure you fully understand the terms and conditions. Ideally try and get the information clearly spelled out by a customer service agent by email or live chat so that you have it in writing.
Ultimately a bonus offer might not be such a great deal for certain traders. For other traders a Binary Options Deposit Bonus is an ideal opportunity to increase your binary options trading experience and profits while using funds provided by the binary options broker.
Shop For the Best Binary Options Bonus
Don’t be shy to negotiate for a bonus that suits your needs. I’ve opened many different binary options accounts in order to do the broker reviews for this site. Several times I’ve had account managers offer me a “special bonus” that wasn’t advertised anywhere. Brokers are under great pressure to add accounts and the bonus deals are constantly changing. Right now you can open a 24Option account and receive a 100% match bonus on any deposit. This deal isn’t promoted anywhere, but if you request it they will give it to you. OptionFair will give you 5 risk free trades upon opening an account. These are just a few examples of the “special deals” that I was offered.
The bottom line is if you are intent on taking the binary options bonus make sure you understand all the terms and conditions and ask the account manager what’s the best deal he can do for you.