Binary Options Bonuses
A Bonus is To Trade With
A bonus is provided so that a trader can increase the amount staked on each trade, while still maintaining their money management strategy. So lets say you follow a 5% money management strategy and have $1,000 in your trading account. This means you can safely stake $50 per trade. Now lets say you take a 100% bonus and now have $2,000 in your trading account, by following the same money management strategy you can safely stake $100 per trade. So do not forget that a bonus is money given to trade with.
It is for this reason, to ensure that the bonus can only be used for trading, that it is accepted practice within the industry to apply a trading turnover requirement to any bonus. Once the trading turnover requirement has been met the bonus will be usually be released and may be withdrawn.
In order to ensure the bonus is used as leverage as intended, a trading turnover must be met and is equal to a factor of the deposit and bonus. The total volume of your trades must exceed this amount and then funds become available to withdraw.
It is important to note that some brokers will withold all funds including money you have deposited until this trading turnover is met. Any broker that is regulated is not permitted by the regulator to withold client deposited funds, so make sure you check with your broker, read the terms and get everything in writing before you accept a bonus.
While bonuses can be advantageous and profitable, you are never required to accept them. It can be tempting to take higher risks when you trade with the bonus money, meaning that you stand to both make and lose more money. We encourage you to trade responsibly to avoid loses, and remind you that every bonus requires a trading turnover before a withdrawal is made.
What Can I Withdraw?
This is probably the most contentious issue regarding bonuses, so lets try and lay all the cards on the table. There are findamentally two kinds of bonus and you need to know which you are taking:
- Cash Bonus. This can be withdrawn once the turnover requirement is met.
- Non Cash Bonus. This bonus can never be withdrawn. You can only withdraw the profits generated once the turnover requirement is met.
The next issue is whether the broker will let you withdraw the funds that you deposited (not the bonus) before the turnover requirement is met. This is what you really have to look out for. Many brokers will tie up all your funds including the money that you deposited until the turnover requirement is met. This is where regulation comes in, all regulators prohibit this practice and if you find yourself in this position then file a complaint with the regulator.
Most regulated brokers are regulated by CYSEC the Cyprus Securities Exchange Commission. CYSEC now have restricted the scope of bonuses that can be offered by brokers that are regulated.