One thing is for sure; binary options brokers want your business! In order to get this they offer binary options bonuses to entice traders to sign up. The industry has become increasingly competitive. The upshot is that brokers are offering every higher first deposit bonuses in order to attract new clients to their platforms. In fact, some of the deals on offer seem too good to be true.
One of the key ways in which binary options brokers seek to attract new customers is to offer potential new clients something free. This normally takes the form of a free account bonus. This ‘bonus’ is awarded on your first deposit and generally the higher your deposit, the bigger the bonus you will earn.
To the uninitiated trader this bonus may look like free money. After all your account will swell once the broker adds it to your balance. As is the case with many brokers these days you may even seen your balance double. Yes that’s right. Brokers will often match your deposit with a one-hundred per cent bonus!
Of course you ‘don’t get nothing’ in this world for free. Unfortunately the binary deposit bonus is one of those things where there are strict conditions attached. These can catch out the unwary trader so it is important to understand how they work.
Your Bonus Is Not Free Money
The deposit bonus that you receive from the broker is designed to boost the amount that you can trade with. It is not ‘money’ as such. The idea behind it is that if you have more money to trade with you can trade larger amounts and thus generate higher profits.
This allows new traders, with only relative small amounts, to build up decent sized sums in their accounts. For example if you receive a 100% bonus from your binary options broker on $500 then effectively you have $1000 to trade with. Rather than trading $50 per contract you can now do so with $1000. Thus you get the chance to increase the profit that you make on each contract.
There are however terms that are attached to this. This normally includes the requirement to trade a certain volume through your account. This is before you are able to withdraw your profit or the bonus amount. The exact conditions will depend upon both the promotion and the broker. You should however check this out before signing up to the offer.
Should You Accept A Binary Options Bonus?
Brokers don’t only offer bonuses to new traders. Existing traders will also often quality for promotions from their broker. This may be linked to new deposits or even ‘risk free trades.’ These are a new incentive that is frequently offered to new traders. Again they are not ‘free’ as such, as they will have conditions attached.
Choosing whether to accept these offers from your broker comes down to your personal circumstances. It also depends upon whether you are into binary options for the long game. The requirement to trade in some instances, significant volume can mean that the trader is tied in for a long period of time. In some instances if you don’t have a good strategy for Forex, this can be longer than your account balance lasts!
The rule that you should follow is to read the specific terms and conditions attached to any broker bonus offer first. Then if you are happy you can make the decision of whether to accept it or not. Approach these from the point of view that if you accept nothing then you can’t be accountable for anything further down the road. For this reason you might want to avoid binary options bonuses and keep your account clean and unfettered.