Please note, before we talk about binary options bonuses: CySEC does not allow their brokers to offer bonuses any more. So if you want a bonus on your deposit you need to go with a non CySEC regulated broker and this is not something we can recommend. It is better to relinquish on a bonus instead.
A bonus is an amount of money that is credited to your account under certain circumstances. A binary options broker could offer a bonus like that: You deposit $100 and will receive a $50 bonus. This makes it possible to trade with $150 in cash. Now you may think that this can’t be true because you get money for free but that’s only half the story. Brokers are not dumb and attach conditions before you can cash out the bonus money and make use of it. And there are some major differences between different brokers. A $100 is not a $100 bonus. At broker A you may have a turnover requirement of $5,000 and with broker B it’s only $3,000. This means you can cash out the bonus money way quicker with broker B.
First of all: size is everything. At least everybody first looks at it. But this is not the only criteria you have to consider when using a binary options bonus. Let’s assume you get a $5,000 bonus. You think that’s great? Well, then you should consider your turnover requirements! For most traders this is a bonus amount they can never cash out, they can virtually trade for years. Just comparing the bonus amount is like comparing apples and oranges. Even if the conditions for that huge $5,000 bonus are absolutely fair it just won’t make any sense for most traders. Most traders are over confident and think they could clear high bonuses easily. They deposit little money and want the bonus to be as large as possible. Later they find out that the bonus amount is too high and they can’t reach turnover conditions.
That’s why it’s better to take a more conservative approach: Better pick a smaller bonus amount with your first deposit. Let’s assume there’s a 50% up to $200 bonus. In this case you’re better off depositing a smaller amount like $100 giving you a $50 bonus – not bad either. Then you can deposit another $100. This way you trade with $250 and only have a $50 bonus. This makes it way easier for you to fulfill turnover requirements.
As already mentioned there are conditions for every single bonus offer. No broker will give away cash for free. When you get a $50 bonus today, you won’t be able to withdraw it right away. It may be even possible that you can’t even trade with this bonus money and wait until turnover is reached. But there are also broker that credit the bonus money right after your deposit and allowing you to trade with it.
No matter how the bonus is credited, you have to consider turnover conditions before you can make a withdrawal. Those can be 20x bonus amount for example. That means that when you have a $50 bonus you have to make a turnover of $1,000 before you can cash out the bonus money. When you buy options for $1,000 you fulfilled the bonus conditions and can buy something with it.
Always consider that there are three important criteria you have to consider when using a binary options bonus: Bonus amount, turnover requirements and when the bonus will be credited.
Whilst many binary options brokers offer a bonus as a percentage of the initial deposit, as we have already seen, this may not actually benefit the trader in terms of being able to use or withdraw the bonus. The incentive of 50% additional capital, however, is often too much for many to resist and it is easy to see why this has been the most effective way for brokers to attract traders to their platforms. Beyond these financial incentives, some brokers may offer non-financial bonuses which, given the difficulties described above, may be even more valuable to new traders than simple cash credit. The bonuses include essential education material such as trading e-books and online trading courses. The educational aspect of these bonuses can be much more beneficial to new traders than a financial bonus; providing a basis for trading and learning technical and fundamental analysis and how markets operate. Most brokers already have fairly extensive education centres to help inexperienced traders learn how to trade and as an introduction to those new to binary options. Those that go beyond this and offer bonus access to provide more in-depth trading information to their customers are certainly worth considering as an alternative to those providing simple cash incentives.