Trading bonuses were virtually unheard of four to five years ago. The binary options market was deregulated to allow retail traders in 2008, so it met the bonus revolution that was taking place in other markets. Bonuses are now so commonplace that it would be hard for any broker that does not offer some kind of bonus or promotional offer to get any clients. It is for this reason that virtually all binary options brokers have inculcated the bonus culture pioneered by their forex counterparts to introduce binary options bonuses and promos to the market.
So what are binary options bonuses and promos? These are offers to traders to match deposits into their accounts with additional amounts of money strictly for trading, or opportunities to earn benefits in several ways as rewards for engaging in activities that earn more money for the broker.
Binary Options Bonuses FAQ:
Bonuses and promos are designed to be a win-win situation for both trader and broker. The trader can get access to more trading capital with the opportunity to scale up the size of their investments and hopefully the amount of money they make. The broker then makes money from the greater commissions arising from larger sized trades.
How did binary options bonuses come about? Generally, bonuses were born out of the need to motivate traders to come back to the market after the global financial crisis dealt a sucker punch to many traders, making millionaires paupers overnight. The fear factor was working in overdrive and many traders were bailing out with whatever they had left. Many brokerages lost a lot of business and had to massively downsize. It was a very ugly situation that needed answers very fast. In order to shore up investor confidence, brokerages came up with an ingenious idea: dole out the bonuses and get the attention of traders in the market.
Now everyone is giving out bonuses and the traders are coming back in droves.
How to claim Binary Options Bonuses
There are different types of bonuses:
1. Account Opening Bonuses
This is the one that every broker gives nowadays. The bonus percentage varies from as low as 10% to as high as 100%. This is usually given to first time participants in the market. They are deposit bonuses, meaning that a trader must deposit funds in order to get hold of this category of bonuses.
2. Special Bonuses
There are many bonuses that constitute special bonuses. These are as follows:
– Bonuses given during times of market volatility
Here, brokers will present volatility as great opportunities for profitability. What better way to do this than to get a generous bonus added to your account? Some traders have realized that these are good times to get a bonus, so if something big is happening in Europe as regards the sovereign debt crisis or maybe there is much market fuss about rising gold prices or lately, the fiscal cliff in the US, then bonus season beckons. So if you are looking to get some good binary options bonus deals, watch out for periods of great market volatility.
These situations have presented themselves in the past and they will present themselves in the future. So watch out for them.
– Seasonal bonuses
Some brokers give out bonuses to traders during Holiday seasons. Easter, Thanksgiving, Christmas, etc. are all periods when seasonal bonuses are given out.
Applying your Binary Options Bonuses correctly
Bonuses may look like free money, but they are not actually free. Bonuses are meant for trading purposes only and even though brokers ask traders to generate some trade volume before they can be withdrawn, that should not be the trader’s focus. There is a broker that requires traders to generate trading volume worth $15,000 in order to withdraw $500! Not worth the trouble.
Your job as a trader is to use the bonus correctly and not serve as shark bait for the sharks in the market. Speaking of sharks and shark bait, the real sharks in the binary options market beware of brokers with questionable regulation who use 100% bonuses to lure unsuspecting traders into their platform, and then cook up some reason to seize the trader’s funds. Binary options trading is gradually falling into the regulated market space so very soon, there will be no hiding place for these scammers.
Take your binary options bonuses when you can, but use them wisely. Also, make sure to check the terms of any deal!