Binary Options Bonus – All You Need To Know to Get Your Bonus
Almost all Binary Options brokers offer bonuses and special promotions in order to attract more and more clients. Bonus is generally a good thing, however, I’ve stumbled across too many beginners who had the wrong impression about the bonuses given by their brokers and consequently lost money or just had the wrong impression about Binary Options in general, and brokers specifically. One might think that the higher the bonus the better the chances one has to generate high profits. Well, that’s not completely correct so in this huge article we will cover all the questions you might have about bonuses and the restrictions but also the advantages that come with them. Get your thinking caps on, get a coffee ‘cause you’re gonna be here awhile ;)
What is a Binary Options Bonus?
Bonuses and other promotions are a great boost for getting you started. For example, one could invest $500 in order to receive another $500 from the broker, for a total account balance of $1000 (that’s a 100% bonus). I’d say the average bonus is about 50% to 100%. Most brokers 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.
In case that’s the first thatsucks.com article you’ve ever read, you probably haven’t seen the article discussing broker’s terms and conditions and their implications on potential and existing traders. After reading about Binary Options bonus issues here go back and read that important article since Binary Options brokers also apply some restrictions on the bonuses given. One important restriction is concerned with the withdrawal of profits.
Binary Options Bonus – How Does it Actually Work?
Let’s say I decide to open an account with XYZ Broker. My initial investment is $250, there’s a bonus of 40%, so in simple math I have $250 + $100 bonus prize ($250*40%=$100), which adds to a total of $350 that I now have in my account. Now what you all should understand is that in order to withdraw my deposit and the bonus I need to trade an average of between 20 – 30 times the volume of the bonus, depending on the specific broker I am trading with. For this example, let’s assume my broker requires me to trade 20 times the volume of the bonus:
Since the bonus was $100, I have to multiply that by 20 so: $100*20 = $2000 (including losses). Basically, a total trading volume of $2000 is needed in order to withdraw the full amount of the profits plus the bonus prizes. In case I’ve decided to withdraw my money without meeting these demands, a proportional sum will be deducted from the account or in some other cases the broker will not allow the user to withdrawal without meeting these restrictions. These restrictions are not implying anything about a Binary Options fraud; they are actually a basic guideline for all bonus factors given by all Binary Options brokers. It is very important for traders to carefully read all terms and conditions regarding the brokers bonus restrictions and make sure they understand everything about these restrictions.
How to Get a Bonus?
If you haven’t been offered a bonus by your broker, which is a very extreme case, simply ask your account manager for a bonus. Don’t forget to ask about the wager rules and make sure you choose a trusted broker.
My Advice Regarding Choosing a Bonus
My advice for all traders is not to embrace the hugging arms of large bonus givers (over 35% is too much bonus in my opinion) 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, very soon you’ll find out that trading with a volume of $1500 or so is actually one month of trading, maybe two. Using the bonus with care could really boost up your profits, but frankly, I would ask for the minimum bonus from your broker’s account manager (you can thank me later!).
Now that we know a bit about the mechanics behind binary options bonuses, it’s time to delve deeper into the types available. Yea, brokers tempt you with a multitude of bonuses so you have to know what they are offering. This means we are moving on to the next part of this article… told ya it’s gonna be a long one.
Types Of Binary Options Bonuses – Everything You Need To Know
There is never a shortage of Binary Options Brokers; in fact, the internet is full of websites and companies who urge you to deposit with them and “start profiting now” from trading online Binary Options. If you need a broker, you will find one in less than one minute with a simple Google search. However, the main problem is not finding a broker but finding a good and reliable one. Well, that’s harder to achieve because most of them are mirror images of one another: same features, same educational material… same everything. Since most of them are similar, they try to make up for this by becoming more appealing to clients with the use of different bonuses. There’s a variety of bonuses out there, with both benefits and drawbacks and this article tries to explain some of the most popular types of Binary Options bonuses. So let’s see how the brokers lure us or try to help us.
Welcome Bonus or First Deposit Bonus
This is the most common type of binary options bonus and it’s offered by almost all Binary Options Brokers. It’s simple to understand: once a first deposit is made by the customer, the broker adds extra capital to the trading account. This extra capital can go as high as 100% of the first deposit but 30% – 50% is more common. But… there are strings attached! The main drawback is they usually limit your withdrawal options: in order to withdraw the bonus, you will have to trade a certain volume which is usually 30 times the bonus. To be honest, that’s pretty fair from their part because if it wasn’t for this limitation, people would just deposit $1000, receive an extra $500 as a bonus and withdraw all of it the next day. Presto… Instant millionaire! So this requirement is okay but most brokers restrict your ability to withdraw your own money until you trade the required volume. Now this sounds fishy! It is normal for the brokers to try to protect their money, but why keep me from withdrawing my own? Let’s assume a client received a bonus but decides Binary Options trading is not for him. Now even if he is willing to give the bonus back, he is not allowed to get his money back… This is the main drawback of any bonus and you should carefully read the Binary Options Terms and Conditions before accepting any bonuses.
Next Deposit Bonus or Continuation Bonus
There is no exact name for this type of bonus but basically, every following deposit is credited some extra money. So if traders decide to make another deposit, they will also receive a percentage of that deposit or a fixed amount, depending on the broker’s policy. This bonus is rarer than the “Welcome Bonus” and another thing to note is that traders will receive a significantly smaller amount than the one received when they made their first deposit.
No-Deposit Bonus
We will be talking about this one in detail later so here’s just a “teaser trailer”: to receive this Bonus, the trader just has to open an account and isn’t required to make a deposit – just like the name indicates. It’s a rather new type of bonus and comes with a lot of strings attached (the trading volume required for withdrawals is usually higher) and it is often offered through third party websites. Adding a third party website to the equation raises more questions related to the reliability of this new website and hidden conditions or terms. However, there are a few brokers who offer the No Deposit Bonus themselves but this is rather the exception, not the rule (Binoa). Usually the No Deposit bonus is much smaller than the First Deposit Bonus and offered by fewer brokers.
Pending Bonus
This is similar to the First Deposit Bonus but with a twist: you don’t receive it until a certain trading volume is reached (24Bulls – bonus progress bar). Some brokers show a bonus progress bar so you know how much volume is still required; once the bar is complete, the bonus is unlocked and becomes available for trading.
Limited time Bonus offers
From time to time, brokers have special Promotions. These are not fixed, differ from broker to broker and include but are not limited to gifts or the possibility to win special prizes or even a higher bonus percentage for your First Deposit. Often, broker representatives will try to hurry you into depositing saying the offer is valid “only today” and you need to open your account right away so you don’t miss the opportunity but from my experience, this type of offer usually lasts more.
Special Bonuses
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.
Educational Bonus
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.
Refer a Friend Bonus
The Refer a Friend bonus is received when an existing client persuades another person to open an account with the same broker and fund it. A common condition is that both traders open at least one trade on the platform but as you already know, all bonuses come with a lot of other strings attached so I recommend you read their Refer a Friend policies entirely. Also, consider another thing: if the broker you are referring your friend to is not 100% trustworthy and reliable, will you throw your friend into the lions’ pit, knowing he or she will get scammed or duped into investing more money with a bad broker? Hmmm, I wouldn’t do it…
Trading Competitions
Trading competitions are not exactly bonuses because you have to trade well in order to receive the prize, but I will list them as a bonus because often the trader is not risking his own money. Instead, virtual money is used and at the end of the competition the highest ranked trader (or the first 3) usually receives a money prize (or gifts, depending on the broker who organizes the competition). Some competitions require the trader to use his real account and at the end of the contest period, the winner receives the prize on top of his profits made from trading.
VIP Bonuses
Regular traders like us cannot receive such a bonus because it requires a huge first deposit: above 100K!!! But the lucky rich guy who deposits such a sum will receive help with getting tickets to a sold out event, a personal online assistant to answer his calls, order gifts online, and other perks. I have only seen this type of bonus once and I don’t really find it useful because of the enormous deposit needed.
Free Bonus, No Deposit Needed?
Let me set this straight right from the beginning: there’s no such thing as a free gift in this industry. If you’ve been offered a non-deposit 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. As we’ve talked above, most Binary Options brokers offer some kind of bonus with your first deposit. This is supposed to sweeten the deal, but it usually comes with a sticky string attached. Now some brokers are offering a free bonus. Find out what this honey trap means for you and your trading.
Get Your Free Binary Options Bonus, No Deposit Needed!
Some brokers are using this new bait to lure traders into the fold. As we’ve seen in the first part of this article, regular bonuses (the ones you get when you deposit money) come with ridiculous trading limitations and minimum trading volumes, can you imagine what it might take for a “free” bonus to actually clear into your account? They may as well call it a demo account. By the time you trade enough to earn the money you could be retired from trading your own real money. A normal, run-of-the-mill deposit bonus usually comes with a minimum trading volume equal to 20 or 30 times the total of the original balance and the bonus. I have seen some as low as 15 and others as high as 50 depending on the size of the bonus and the size of the account. I was completely flabbergasted when I started checking into these supposedly “free” bonuses.
What Do You Get With A Free Bonus
For this example, I am going to use a broker called BINOA (Also, a good example of a shady broker. It’s already been taken down). There are many others, but this is a broker I have reviewed before and one that still accepts U.S. traders, even if on a limited basis. They are offering a $50 free bonus just for opening an account. This is great, but what does $50 really get you? First, when you read the terms of use, you will see a statement saying that you must make “at least one deposit before making a withdrawal”. This means that even if the free money turns out to be free you still have to make a deposit before you can get it. Now, in order to make a withdrawal you must also trade a minimum of 20 times the original deposit plus any bonuses. All withdrawals may also include a charge of a $35 dollar fee. There is no mention of one free withdrawal or free withdrawals with high level accounts, just $35 for each withdrawal.
BINOA also offers other bonuses along with their accounts. Since you will have to make a deposit before you can even think of withdrawing your free money it is likely you will get another bonus as well. Digging deeper into the terms of use I also discovered that if you take a bonus, you HAVE to trade the 20X minimum before withdrawing ANY money or else you forfeit all bonuses and profits. So in the end you will have to make a deposit to get any bonuses, including the free $50, and then trade a minimum of 20 times before making a withdrawal and then pay $35 each time you do make a withdrawal. It looks to me like the $50 is just a way to get a free withdrawal if you want to trade 20 times your account before taking out any profits. I don’t know about you, but if I trade $10,000, and make 10 times its value ($100,000), I am going to want to take out some money and go throw a party.
Is A Free Bonus Worth It?
Not really. At least not in my opinion. Think about it. It’s just $50. Even if you make the minimum deposit, which, with this broker varies according to method, (but it is around $50 to $100), you will have to make a lot of trades to get it. An account of $100 (minimum+free $50) has to trade $2000 before you can actually have the money. And when you do want to withdraw, according to the withdrawal policies of BINOA, it will take up to 45 days to get it. So is it worth it? Is it? I mean, maybe if you are using the account as a practice account, but in that instance you are probably going to be making the smallest trades possible. Smaller trades mean more trades, if you return 30% a month on the total account it could take you more than a year to reach 20 times the trading volume required to get the bonus!
We Can Trick The Brokers Too
Well, maybe. If you are really good and can make several large trades in a row without losing you could get the free money. If you trade the $100 at 100% every time, returning the website average of 70% each time, you will reach the minimum volume in only six trades. Six trades don’t seem like a lot, but when was the last time you had six trades close in the money consecutively? When was the last time you did that regularly? It is possible, but in this scenario, it only takes one trade to lose the whole account and then who gets the free $50? (Hint: Not you).
Hopefully after so much yapping from my part, by now you are pretty familiar with Binary Options Bonuses and how they work. But what’s the bottom line, the conclusion? Do you really need that trading bonus or not? Here’s the last part of this Monster Article where that question will finally be answered:
Some Reasons Why You Really Don’t Want That Trading Bonus
Bonuses are a hotly contested issue. Some brokers have them, some brokers don’t. Some brokers use them like a weapon and others simply offer them as a little something extra. Whatever the case there are some reasons why you might not really want to take one. I know it is awfully attractive to be offered an extra $100, or 50% or 100% of your deposit but you need to be aware of a few things first. As we have said here on BOTS time and time again, free really isn’t free, especially when it comes to binary options. You have to understand that there is a reason why brokers offer bonuses and it is not because they like you, well, not exactly; They like you to deposit your money and then leave it there. The best brokers will have a bonus, but you will have to accept it or ask for it. The worst will add it in automatically with the average broker falling somewhere in between.
The very first thing you need to be aware of is that all bonuses come with a trading volume minimum that you must reach before the bonus money is really yours.
And that is assuming the bonus is ever eligible for withdrawal because they all aren’t. The trade volume is an amount of trading generated by your account equal to a preset amount. This is usually in the range of 15 to 50 times the original deposit or account balance + the bonus. This number is the amount of money you must risk, not how much you have to win. If you deposit $100, get a 100% cash match bonus and a 30 times deposit + bonus minimum you will have to make $6,000 in trades. If you were to use sound money management in your trading and not gamble large amounts you may have to make as many as 800 trades or more just to meet the minimum. I don’t know about you but I don’t trade with a lot of frequency. I may make 6 or 7 trades a week, depending on conditions which means it could take me over two years to reach the trading volume minimum! This is only reason why bonuses may lead you to make risky trades and why the brokers want you to take one.
Now, in addition to the trade minimum there is also a withdrawal restriction.
This is perhaps the number one reason why brokers want you to take a bonus. It makes you leave your money in the account so you have to meet the minimum. I understand that there must be some restrictions, they aren’t going to just give money away, but it is something that some brokers use to their advantage. This is how it works; you can’t make a withdrawal until you meet the trade minimum. This includes your money, the bonus money, and all profits generated by your account. In fact, most brokers will automatically cancel the bonus if you even try to withdraw money beforehand. CySEC regulated brokers are much better about the bonus and withdrawals policies. They at least let you withdraw a portion of your principal and winnings on a per diem basis as you meet certain levels of the minimum requirements.
Where the situation gets really sticky, and not in a good way, is when you take more than one bonus. This may mean you will never ever be able to make a withdrawal. This means you will have to clear not one, but two, bonus requirements and they are not met concurrently. You will first have to clear the one, and then the other. And let’s not get into when you take a bonus on bonus money. Brokers, even a good one, can use this fact as a tactic to keep your cash. Offering bonuses so often and for so many reasons that you may lose complete awareness of how many you have actually taken. And all of this is not even considering the amount of spam emails and phone calls you will receive from your account representative. You know the old saying “never feed a stray”? It’s around for a reason. Once you take a bonus, and especially if you take an additional bonus, you will be pestered by your broker every chance they can find.
It’s Easy To See Why Bonuses Can Suck
I’m sure by now you can understand why I don’t like to recommend big bonuses. There are arguments to the effect that they can enhance your returns, improve your money management and are good for low depositors and this is true. But you need to know what you are getting into before you take one or you will be sorely surprised when you try to make a withdrawal. A 50% max bonus is our bottom line. To get your bonus simply register at one of our recommended brokers.
Whew! Now that was a long one, but considering that so many problems happen because people don’t understand how the Binary Options Bonus works, I think it was necessary to bring you a Master article that talks about all the main aspects, perils and advantages of this important feature. Now you know!
REMEMBER there’s no such thing as a Free Gift !