Deposit Bonuses for Binary Options Traders
Before 2008, there was no such thing as a binary options deposit bonus. But following on from the industry’s deregulation in 2008, binary options brokers suddenly found a great new way to attract new clients. Bonuses had been around in other trading markets for many years, and had proved themselves to be very successful marketing tools. Nowadays, there are many binary options brokers offering some very attractive deals. However, as with many great offers, there is a downside to such schemes, and we’ll look at that a little later; but first, let’s look at the positives attached to a binary options bonus.
Bonuses come in many shapes and sizes, each specific to the broker offering them. They range from basic deposit-match bonuses to more specific offers linked with referrals, iPads, and tablets. Some brokers also offer a free service or software that would normally be paid for. Most bonuses, whatever type they may be, come with their own set of terms and conditions – and this is one thing you need to be wary of. If the bonus consists of additional funds added to a trading account, it is often a requirement that the funds are traded, or the binary options deposit bonus “turned over” a specific number of times. These terms have to be met, or else there is no chance of withdrawing any funds. If the bonus is a service or a software giveaway, it is often only triggered when the broker has earned a certain amount of commission through a trader’s activity.
What is a deposit bonus in binary options?
A binary options deposit bonus is usually paid when a new account holder makes their first deposit. Sometimes, it can also apply to subsequent deposits. The amount could be anything up to 100%, and in some cases more. For example, if a deposit bonus is 100%, it effectively doubles the initial deposit, which can seen very appealing. An investor has increased the funds available to trade with, and the broker hopes to see increased volume in trading activity. This type of bonus is clearly offered to attract new customers, and is often time-sensitive, which is designed to encourage clients to trade more frequently. There are a number of other instances when (and why) a deposit bonus can be offered. These include the following:
- To encourage a trader to become active when their account has been dormant for a certain length of time;
- If the market is quiet, or the broker is experiencing a quiet time, but also if the market is volatile and traders are slowing down on their trading activity;
- As bonuses for loyal customers;
- As cash-back bonuses, often given to high-volume account holders.
There is in effect, only one fundamental reason behind making such an offer, and that is to keep the trader active in the market, which leads to more business for the broker. Brokers, of all kinds, thrive on volume This is borne out by the fact that the bonus will expire after a short period of time.
Tips on making the best of a binary options deposit bonus
Even the best deposit bonus for binary options comes with its own set of terms and conditions – and these have to be looked at very closely if you want to make the best of such a deal. Provided you can meet the requirements, the deposit bonus is naturally a great way to boost trading funds. If however, you think you may struggle to meet any of the ‘turnover’ requirements, then it is better advised to steer clear of accepting these offers. There can be a temptation to over-trade in order to meet the criteria, which is something that many established traders would advise against. Whether one should take advantage of these types of bonus all depends risk appetite as well as fitting in with one’s trading strategy. If the extra funds a bonus provides you can assist your trading plan, such that you will be able to meet the terms and conditions, then bonuses are naturally welcome. In this case, they will eventually speed up the growth of your account funds.
Initially, a deposit bonus is a good way to boost funds in a trading account; and with some careful research you should be able to take full advantage of the best binary options deposit bonuses – provided, of course, you are certain you can meet the requirements in the normal course of trading.
Another factor to be wary of are the withdrawal terms and conditions. Some brokers, offering what looks like an attractive deal, may require a minimum turnover on both the deposit and the bonus before you can request a withdrawal. It is wise to carefully read the smallprint, and if there is any doubt in whether these can be met, then they are best avoided. There is nothing to say that taking up a bonus offer is compulsory.
Different types of deposit bonus offered when trading binary options
There are a number of different types of binary options deposit bonuses, so let’s spend some time looking at the different options to give you a better idea of what is on offer from the best binary options brokers:
- Welcome deposit bonus. This is usually expressed as a percentage, and only offered to new customers. If you make a deposit of $100 and the bonus is 100%, then you will have $200 in your account to trade with, should you take advantage of the bonus.
- No-deposit binary options bonus. This bonus is a little different, as there is no requirement to make a deposit into a trading account. It is often a specific sum of money, and is only available to new customers. It is a great way for brokers to attract new clients.
We briefly mentioned a downside to deposit bonuses, and this comes down to the requirements tied up in the terms and conditions. Many bonuses will come with some pretty hefty trading requirements, and it is tempting to ‘up your game’ and increase your activity in order to qualify for the bonus. However, as we have outlined, this may not be a sensible move, as you should stick with your normal level of trading, both in terms of size and frequency. The world of trading is tough enough as it is without being rushed or encouraged to make more decisions and trades which at the end of the day, you may not feel comfortable with. Anything which disrupts your trading strategy, risk appetite and overall comfort zone is something which should ultimately be avoided.