Many bonuses that binary options brokers offer are paid as a percentage of the money you deposit into your account and require that you trade a volume that’s several times the value of the bonus before you can make any withdrawals. The more you’re prepared to deposit and trade, the higher the value of the bonus. In some cases, however, binary options brokers will offer no deposit bonuses where you aren’t required to make any deposit into your account to qualify.
The concept of a trading bonus on your deposit amount is that you will have more money to trade and so will trade more often or make bigger trades, thus earning the broker more income in the form of trade commissions. No deposit bonuses don’t have the same effect, however, and are made for different purposes.
Different Forms of No Deposit Bonuses
Brokers will sometimes pay a rebate bonus as a percentage of trading amounts, which is intended to reward high volume customers and encourage them to continue to trade at a high level. Traders joining through certain affiliate schemes can receive an affiliate bonus on top of their sign-up bonus on the initial deposit while existing members may receive a bonus if they refer others who become members. These types of bonus are intended to boost membership and therefore increase overall turnover.
A common form of no deposit binary options bonus is awarded to the winner of a trading contest, which is generally a marketing ploy that is intended to increase the membership for the broker. Binary options brokers have realized that certain types of marketing, such as pop-up online advertisements, are often ignored while television advertisements and other forms can be extremely expensive. Running trading contests with a no deposit bonus as a reward to the winner is therefore seen as an alternative means of publicizing a broker’s services.
Typically, a broker running such a scheme will offer an amount of money to the winner of a trading contest. All entrants will generally trade on the broker’s demo account so no actual money is traded during the contest but a winner can be determined at the end of it. However, the winner of the contest will not receive any actual money but instead is usually required to open a live account with the broker and the no despot bonus money is then deposited into it so the winner can use it to trade.
Restrictions on Withdrawals
The usual arrangement then is that the winner will not be able to make withdrawals from the account until certain conditions have been satisfied. These may include the requirement that a certain volume of trading is undertaken before any withdrawal is permitted or that the winner has to introduce other members who make deposits equivalent in value to the bonus amount.
Binary options brokers that run no deposit bonuses include:
Binary Options Free, which offers a no deposit bonus to those who sign up for membership. However, trades with a value of twenty times that initial bonus have to be made before any withdrawal is allowed. Since the bonus is currently set at $100, this means $2000 has to be traded before making any withdrawals so you need to be confident you can turn the bonus into a profit before signing up. The broker also offers $500 in trading capital to those who refer a certain number of new members who make deposits and start to trade.
Plus 500 offers a $25 no deposit bonus to those who register a live account and validate their phone number. This requires a phone number to be entered to the online form, with a three digit code sent to the phone by SMS that is then entered to the form as validation. Once the number is entered, the account is credited with the $25 bonus.
Extensive Trading Needed
All no deposit bonus offers come with a certain number of restrictions that mean they’re not as attractive as they first seem. Generally, you have to trade extensively before you are allowed to make any withdrawals, often having to turn over thirty times the bonus amount or more. That means you’ll probably have to make further deposits and can’t withdraw anything, even your own money, until you achieve the required volume.
Providing a no deposit bonus is often a means of obtaining your contact details, which may then result in a lot of marketing messages coming your way. As a result, the provision of a no deposit bonus is seen as no more than a scam by some and is to be avoided. Using a broker’s demo account, where you can practice trading without risking money, is often seen as a better option because there are fewer restrictions imposed.