What You Need To Know About Binary Option Bonus Money
Binary options bonus money is a two edged sword. For an experienced trader it is free money, all you have to do clear the terms and it’s yours. For the novice they can be the source of nightmares and financial ruin. Like they say, free is never really free, there are always strings attached and this is true with bonus money. I’m not saying they are bad but I am saying you shouldn’t just take one without really understanding what they are and what it means to accept one. If you have a good strategy and know that you can remain profitable or at least break even long enough to make the turnover then there is no reason not to take bonus money. If you are a newbie, aren’t sure what you are doing or think you may need to make a withdrawal soon to pay a bill then you definitely need to stay away from bonuses.
A Bonus, Or A Burden?
No matter how you slice it, bonus money is meant to entice and retain binary options traders for the brokers. It is bait used to lure in new clients and lubrication to get old clients trading, and making new deposits. It is possible to withdraw this money, eventually, but you must understand from the outset that it is not real money. Bonus money is nothing more than numbers in your “account”, tokens for playing the binary options trading game. The broker knows that the average person will eventually wipe out their account so to make it more fun they give you extra “money” to prolong the experience, after all, the more fun you have the more likely you are to deposit more money, right?
OK, like I said it is possible to eventually withdraw bonus money but it will take time. One of the stipulations of a bonus, one of the terms and conditions of trading, is that there is a turnover amount. This turnover is a set amount of trading volume you must make in order to clear the bonus and consider it, and profits made from it, your money. For the most part average binary options broker will not allow any withdrawals until the bonus is met, this keeps the real cash in the account while trading is going on. Low turnover is about 20X the BONUS amount. A high turnover amount could be 30X or 40X the BONUS and DEPOSIT. This means that if you get a bonus of $1,000 you’d have to make trades equal to $20,000 to $80,000, depending on terms, before you could make a withdrawal. Stop what you’re thinking, you will not be allowed to make large trades in order to clear the bonus faster. Most brokers cap the limit at 50% of your account but some are much lower.
Some brokers, specifically CySEC brokers, are using a new sliding scale to unlock your deposit and profits as you trade. They figure out what percentage of your account and profits is bonus or bonus derived and when you make a corresponding amount of trade volume that portion is free for withdrawal. The very best brokers and MarketsWorld is one of them will not give you the bonus until AFTER you clear the volume. These are best because they are a reward for trading completed, earned by success, and not a hurdle to making withdrawals. It doesn’t matter if you withdraw, or even if you add more money, so long as you make $XXX.XX amount of trading.
For the most part though bonuses are given when you make a deposit and match the funds you pay into the broker. Bonuses are offered in a number of ways but the two most common are First Time Deposit Bonus and any other bonus given for follow up deposits. Typically a bonus will be a % of your deposit amount, up to 200% or more in some cases. Other bonus types exist as well though and it is important to recognize them. These include but are not limited to Risk Free Trades, Trade Insurance, Cash Back o any opportunity the broker has to “give” you money other than when you win a trade. First time deposit bonuses are sometimes added to your account automatically so be aware when making deposits. Other deposits can be automatic as well and are almost always available in some form if asked for.
The Verdict On Bonuses
The verdict here is you have to be cautious. There are both good and bad uses of bonus money on the trader side and on the broker side of the equation. On the trader side it is free money, if you are confident of clearing the turnover, aware of the terms and use a trusty broker I say go for it… provided you aren’t using the gas&grocery money. On the broker side bonuses are a great marketing and retention tool. They help attract clients and keep them trading. They can also be used as a weapon to keep you from ever getting your money back much less any profits you may make.