Top Rebate Bonus for Binary Options Traders
We’ve become great lovers of those cash-back deals. You know the ones. You see them at your supermarket, on TV, in magazines, and at almost every corner you turn. Great news then that they’ve entered the world of binary options trading.
Binary options rebate bonuses are a special sort of binary options bonus. They are unrelated to any deposit a trader makes. Instead, they are a form of financial compensation on trading contracts lost by traders. Basically, they are a way to recover some of the money that was lost; and they can actually form an effective part of a solid binary options strategy, by increasing long-term profit margins. Many expert binary options traders recommend their use wherever possible. Want to know more? Does it sound very interesting? Then keep reading, and we’ll reveal all you need to know.
Binary options rebate bonus – What does it mean?
A rebate bonus in binary options trading is a special cash-back deal offered by brokers to traders on losing contracts. Generally, it is around 10 to 15% of the money lost, which is offered back to traders on unsuccessful options-trading contracts. A rebate bonus is in no way connected to any deposits made, but is a way of allowing traders to recover some of the money lost in unsuccessful contracts. Normally, a trader can expect to lose all the money invested in an unsuccessful contract, and this is the way it is for many binary options brokers. However, it seems that brokers have a heart after all, and an increasing number are now offering this sort of cash-back deal.
Do brokers have caring hearts, or is there some underlying reason for rebate deals?
Of course brokers have caring hearts, but that isn’t the main reason for the sudden rise in those offering a binary options rebate bonus. As with most other kinds of bonus, they are designed to keep customers tagging along and continually trading. In essence, it is a loyalty or fidelity programme, rewarding customers for their continued business and encouraging them to trade some more.
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Binary options deposit bonuses are designed to get new customers to register, sign up and start trading; whereas binary options cash-back bonuses are aimed at keeping customers who have already registered. They are about encouraging them to keep trading, even though they may have suffered a few setbacks and lost a number of contracts.
Can binary options rebate bonuses be used to a trader’s advantage?
Rebate bonuses are still a relatively undiscovered jewel in the binary options trading crown. However, a rebate of 10 to 15% can be quite lucrative, because most online binary options brokers or service providers offer payout rates that are lower than 100%. Many offer payout rates of 90% or lower. So imagine the following:
- You regularly invest $100 on every contract.
- The payout rate of your broker is 90%.
- 50% of your trades you win, and 50% you lose.
If you look at the above example you will realise that even though your success is 50/50, overall you will lose money. You might think that a 50/50 win/lose rate would mean that your trades would even out; but this isn’t how it happens, as the payout rates are only 90%. Overall you will have lost 10% of your money – so let’s see what happens when a 15% rebate bonus is added into the mix.
5% profits can be generated, even if you only manage to correctly predict half of the trades entered. Which is why being able to benefit from a cash-back bonus is a huge advantage, even if your predictions are done on a totally random basis.
Binary options rebate bonuses seem like a pretty good deal, much like many of the other types of bonuses available. But are they really as good as they appear?
When should you accept a broker’s binary options bonus?
There’s no denying that binary options bonuses are a great marketing tool for brokers. They are used to great advantage to encourage new traders to sign up and deposit money. What is in essence free money is often the reason many traders choose a particular broker; but are they really all they’re cracked up to be?
The simple answer is no, and sometimes they can do more harm than good. The reason for this is that they usually come with wagering and trading-volume requirements, which are usually specified in a broker’s terms and conditions – a section of a broker’s website that very rarely gets read and understood completely.
Other types of binary bonuses
A trading requirement could read as follows: In order to be permitted to make a withdrawal, you are required to invest your deposit and bonus amount 30 times. This means that if you deposit $200 and get a $200 bonus, your trading volume will have to reach $12,000 in order for a withdrawal to be permitted. When you look at it like that, this seems a very high figure, particularly if you’re relatively new to the world of binary options trading. The terms and conditions can inadvertently trap beginners and traders who make a minimum deposit, resulting in them being unable to withdraw their funds if they decide that binary options isn’t for them.
You should now have enough information, both the good and bad, to make more informed decisions on binary options rebate bonuses related to your binary options trading. Stay tuned, because we’ve lots more to share.