Binary options bonuses: is it worth to use?
Description of the most popular binary options bonuses and their pros and cons. It’ll be interesting for everybody who chooses the broker because of the bonuses. Many of you who have already traded are probably faced with offers of bonuses.
For example, a broker gives you welcome bonus or risk-free bids if you deposit money. Almost all the binary options brokers offer different bonuses. In connection with this, I decided to write an article about bonuses and their effects. I’ll share my independent opinion.
Binary Options: Percentage bonuses
The most common bonus among brokers is the welcome percentage bonus to deposit. The percentage may be completely different. I have seen bonuses from 10% to 150%. This type of bonus is calculated very simply: You make a deposit and automatically get a percent added to your trading account, as the broker promised. Don’t you agree it's nice to deposit $1000, get a 150% bonus on the account, and have $2500 as your final deposit?
The most logical solution would be to immediately withdraw all the money to your bank account and be happy with the good investment. However, it is not so simple. Brokers are not engaged in charity, and the received money should be returned in your transactions. The terms are marked in agreement; according to these rules, the trader will need to produce a certain volume of transactions, after which the money can be withdrawn.
How to calculate the volume of transactions:
For example, you received $100 as the bonus to your deposit. The volume of transactions, set by the broker for this amount is 20 times. In this case, you must make bids for $2,000 ($100 multiplied by 20 times). It is important to know that the volume accounts for all your bets, both profitable and unprofitable, and you are absolutely not limited in time. So, all you have to do is to trade.
In my opinion, the pros of such a bonus are obvious. It’s an opportunity to conduct competent risk management with a limited initial deposit.
Now let's talk about the disadvantages. The most important thing you should know about this bonus is that you can’t withdraw money until you make the necessary volume of trades. If you urgently need to withdraw money, the broker may impose appropriate penalties.
For example, you put in $1000 and received the 100% bonus; you should then have $2000 as your deposit. After some bids, you lose $100 and decide to withdraw the deposit and ask the broker to cancel the bonus. In this case, the broker will remove the $1000 bonus from your account, and the losses will be covered through your money. So, you will be able to withdraw only $900.
If you earned $100, but for any reason, you decide to withdraw the deposit (without having made the previously agreed trading volume), then the broker will remove the bonus from your account and profit you have already earned because you earned it with the help of the bonus. As a result, you will receive only the amount of the initial deposit: $1000.
Binary options bonuses: Risk-free transactions
The second most common type of bonus is a risk-free transaction. This bonus gives you the possibility to make a certain number of bids without risking losing money. That is, if your option is in the money, you get your profit; if your option is out of money, the broker returns 100% of your money.
Riskless transactions begin to "work" immediately after you put in your money and go one by one. Nevertheless, in contrast to the percentage bonus, they don’t always require returning.
First, the bonus "risk-free transaction" may be useful to beginners who want to get acquainted with binary options trading without risking a deposit. The second advantage is for aggressive traders wishing to quickly and safely increase their deposit with large investments.
Cons are the same. If you insist on withdrawing money, the broker can take all the money from your deposit that was lost because of unprofitable options but compensated by the broker. By the way, based on this rule, the number of risk-free transactions shouldn’t exceed the size of your deposit.
Bottom line
Is it profitable to use binary options bonuses? In my opinion, bonuses are certainly beneficial, but with one condition: You have to be 100% sure you can respond to all the conditions. You should carefully discuss all conditions with your manager before receiving the bonus. It is also a good idea to ask him or her to send you mail confirmation of conditions.