All You Should Know about Binary Options Bonus
Binary Options are financial options where the payoff is either a fixed amount of money or nothing at all. Once the trader decides the asset for investment and the broker for the transaction, they decide the expiry time of the trade depending on the type of the asset, its market value and the rise and fall of the market.
Because binary options is a very risky transaction, brokers are often known to offer binary options bonuses and special promotions to draw in more investors. While usually binary options bonuses are a good thing, it is very important for an investor, especially a beginner to examine offer carefully, understand it and only then invest.
A popular myth goes that higher the bonus, better the chances of getting a high profit. Remember that is not always true.
Binary Options Bonus – How does it Work
On the surface, this is how a binary option bonus may seem to work: One might be offered a $1000 bonus to the account on opening and investing $500 dollars. That done, many brokers may also deposit this bonus in your account immediately. But that’s too good to be true. It’s not that simple.
It is very important to go through the broker’s terms and conditions before going through a binary options transaction. Brokers are known to apply some restrictions on the bonuses, the most important being the ability to withdraw the amount after bonus is deposited.
Here’s an explanation. Let’s just say that you have received a 25% bonus on an initial investment of $200. So, by simple math, you receive an amount of $50 in your account. But the broker will require you to trade 20-30 times the volume of the bonus and only then will you be able to withdraw the bonus.
So now because your bonus is $50, you will have to invest $50 x 20 = $1000 (including losses) before you can withdraw the $250 bonus from your account. If you choose to withdraw without meeting these conditions, the broker will either deduct a proportional amount of the bonus, or will not allow you to withdraw without fulfilling the restriction. Understand that this is NOT fraud, but a basic guideline for all binary options bonuses given by binary options brokers.
What to remember when it comes to binary options bonus?
- Do not get tempted by the huge bonuses offered by brokers. On a general basis, beware of being offered anything more than 35% of the invested amount.
- Always read the restrictions, terms and conditions offered by the broker before investing.
- Always ask for the bonus from your account manager.
- Remember that the bonus is good for an initial boost, but it doesn’t make up for your losses.
- You need to use the prize money to trade smartly.
No such thing as “Free Money”
Always remember that, when it comes to trading, there is no such thing as free. If you are being offered a bonus with no deposit, then always check the terms and conditions associated with claiming and withdrawing the binary options bonuses. Most of the times, you may need to deposit more amount than you have won to be able to withdraw the bonus amount.
While investing in binary options is already a risky decision, it is of utmost importance to not increase the risk of falling prey to huge binary options bonus offered by brokers. Always go through the terms and conditions offered by the broker with a fine toothed comb and only invest after having thoroughly understood the transaction.