Bonus Terms and Conditions in Binary Options
Ines Matkovich
UPDATE, December 2016: CySEC regulated brokers can no longer provide binary options bonuses! Many traders get seduced by amazing bonuses offered, and this is another time when golden rule proves itself right once again: if the offer sounds too good to be true, it probably isn’t. Bonus rules are provided by good and bad brokers... Read more
UPDATE, December 2016: CySEC regulated brokers can no longer provide binary options bonuses! Many traders get seduced by amazing bonuses offered, and this is another time when golden rule proves itself right once again: if the offer sounds too good to be true, it probably isn’t. Bonus rules are provided by good and bad brokers alike, so the pure existence of rules is not providing any insurance at all. The difference is that good brokers have reasonable conditions while scam brokers leave to many information open to misinterpretations or don’t have such rules at all. Understanding every aspect of trading as well as terms and conditions is of crucial importance for every trader. Bonuses, funds rewarded to traders after making a deposit, are often considered free money, but they are everything but that. This lucrative offer can bond the deposited amount to the broker, and the trader can have difficulties when withdrawing if he lacks a basic understanding of the bonus terms or the said terms are not clear. Before accepting any promotion, it is always recommended to read terms and conditions to avoid any speculations and problems later. Here is the list of things one should pay attention to. Accepting the Bonus and Knowing Your Rights Very often, a bonus is used as a way to make the trader make up his mind to make a deposit, and this is not surprising as bonuses are usually perceived as extra money that always comes in handy. Before spring 2015, bonuses were often used as a way to prevent a trader from making a withdrawal. Scam brokers were handing them out, and traders were accepting them without much thinking. Unfortunately, some traders have received bonuses without their prior acknowledgement, so CySEC was forced to introduce a new set of rules. Read more on CySEC bonus rules. Understanding the Bonuses According to CySEC, no regulated broker is allowed to add a bonus onto trading account without prior written permission. This protected many traders, but not those who are trading with unregulated brokers. For this reason, it is always recommended to trade with regulated brokerage companies like those on Top List. Sometimes account managers put additional pressure on traders in order to convince them that bonuses are all nice and fun. Traders must always remember that they should have the final say. Before accepting an offer read terms and conditions carefully and then make your decision. Things that every trader should pay attention to are: Required trading volume or required turnover Duration of the bonus How the bonus affects deposit withdrawal? How is the trading volume calculated? How are the profit and loss calculated after the bonus is accepted? Account manager and brokerage staff have a tendency to do all the convincing part via phone call, as it is harder to track what is going on, especially when it comes to scam brokers. For this reason, always insist on written correspondence via email. That way trader can take his time before making a decision, read all terms and conditions, and then, request an offer that can again be estimated for some time. Keeping things in writing is a precaution in case something goes wrong anytime. Bonus Terms and Conditions Terms and conditions are something every trader has to read, but nowadays when we are bombed with T&C for everything, it is easy for this important document to slip by. T&C is basically, an agreement on the behavior of trader and broker that must be obliged in every moment the trader is registered as a user on the platform. Some brokers have Bonus Terms (known also as Bonus Rules, or Bonus Terms and Conditions) as a standalone document while other have it integrated as a part of general terms and conditions. Bonus Types Traders should keep in mind that there are several types of bonuses, and here are few that are the most frequent: Initial deposit bonus or Welcome bonus Bonus awarded when the trader makes the first deposit. The bonus amount is usually calculated in percentages, depending on the deposited amount. For example, 50% bonus on $250 deposit will be $125, so the trader will end up with $375 on the account. The required turnover is usually calculated like with any other Deposit bonus. Deposit bonus Bonus awarded on every next deposit made. This is also the best-known bonus and always has some required trading volume attached. It is mostly calculated by using the formula mentioned lower in the text. In most cases, the required turnover is between 20x and 40x. No-deposit bonus Bonus awarded prior to trader’s deposit, in order to make him more interested in the platform. This bonus usually comes in smaller amounts that enable execution of one or two trades in order to help the trader experience the platform. The bonus amount is not available for immediate withdrawal, as the trader has to reach the requested turnover, that can be somewhat higher (around 40x). There can also be additional conditions for profits withdrawal, like an active account with a deposit made before the request is processed. Refer-a-friend bonus Bonus awarded when the traded recommends a friend who makes a deposit. The amount is usually symbolic: it can be a unique amount of $ or a small percentage of the amount deposited. It can also come with additional specific rules or higher turnover attached. Before accepting it, make sure to understand what rules apply. Risk-free bonus This bonus is very rare and usually consists of risk-free trades, in most cases limited by the trading amount or time frame. This way, if the trader loses the money in those trades, the amount is not taken off the deposit, but covered by the broker. However, the profits made don't automatically belong to the trader, but also require turnover in most cases. Also, every promotion advertised by the broker has specific rules. It is hard to accentuate enough, that no trader should accept any type of promotion or bonus without a complete understanding of the rules applied. When it comes to respected and honest brokers, all bonus terms are usually found in one place, no matter the bonus type, so traders can easily make their decision. How is the Required Volume Calculated? Many traders don’t understand the basic principles of trading bonuses, and some foul brokers don’t even put any effort into explaining it to them. In most cases, trading volume is easy to calculate in case trader knows basic bonus terms. The formula for calculating the trading volume is mostly explained in bonus terms and conditions. For example, the trader makes $250 deposit, and the broker is willing to add 100% bonus with a required turnover of x20. This means that trader has $500 available for trading, but not for immediate withdrawal.  The withdrawal can happen only in case a required trading volume has been reached. In this case, the trader can withdraw bonus profit and deposit, only after the balance on the account is $5,250. Deposit + Bonus x 20 = required volume $250 + $250 x 20 = $5,250 When the trader has reached the volume, the amount (bonus profit and deposit) can be withdrawn. In the case, when the trader wants to withdraw funds before the required turnover has been reached he won't be able to withdraw full amount deposited, but only the initial deposit amount with all invested sums deducted from the deposit. Let's say that in case trader invested in two $25 trades and lost. This means, there are $200 left for his withdrawal. True Stories on Bonus Scams Unfortunately, every forum dedicated to the binary options has at least one topic opened by someone who has been scammed by accepting the bonus. And while their disappointment and rage are totally understandable, it is important to understand how honest brokers provide all necessary information on bonus rules. Most of them do not even recommend accepting the bonus in case the trader doesn’t take it seriously. Banc De Binary warned all traders about problems that occur with bonuses.  Yet, there are many brokers who take advantage on people’s trust and are silent about bonus conditions. After traders try to withdraw their money, they find themselves standing in front of the wall, as broker often declines not only the withdrawal request but any type of communication too. You can read some stories on bonus frauds below. LBinary: Unauthorized bonuses One of the first scams we interacted with was LBinary after one reader wrote about her case. The trader lost $10,000 in a single night, as the broker traded in her name without prior approval, and to make things worse, even added an unauthorized bonus. No matter how much she tried to convince her account manager and customer support to stop, it was impossible. There was no written proof of her accepting anything, and the broker simply took advantage of the customer. Find out more about this case. MyOption: Impossible withdrawals Some brokers, like MyOption, are trying to avoid talking about the withdrawal, in case the trader accepts the bonus. In this case, the trader got a bonus without knowing what the terms of bonuses are, and every attempt to contact the broker was futile. Even after FBO tried to straight thing out, it was impossible to get any sensible answer. The trader was told that bonus can be canceled at any moment, and the deposit is withdrawn fully, but the reality was much different. Learn about it here. Such stories repeat in media every now and then, as scam brokers are always around, and new traders join the binary fever each day. In order to protect your funds from dishonest brokers who operate under unclear conditions, make sure to select the broker that suits you. The most reliable brokers can be found on the Broker's list. 

Bonus Terms and Conditions in Binary Options

By -

UPDATE, December 2016: CySEC regulated brokers can no longer provide binary options bonuses!

Many traders get seduced by amazing bonuses offered, and this is another time when golden rule proves itself right once again: if the offer sounds too good to be true, it probably isn’t.

Bonus rules are provided by good and bad brokers alike, so the pure existence of rules is not providing any insurance at all. The difference is that good brokers have reasonable conditions while scam brokers leave to many information open to misinterpretations or don’t have such rules at all.

Understanding every aspect of trading as well as terms and conditions is of crucial importance for every trader. Bonuses, funds rewarded to traders after making a deposit, are often considered free money, but they are everything but that. This lucrative offer can bond the deposited amount to the broker, and the trader can have difficulties when withdrawing if he lacks a basic understanding of the bonus terms or the said terms are not clear.

Before accepting any promotion, it is always recommended to read terms and conditions to avoid any speculations and problems later.

Here is the list of things one should pay attention to.

Accepting the Bonus and Knowing Your Rights

cysecVery often, a bonus is used as a way to make the trader make up his mind to make a deposit, and this is not surprising as bonuses are usually perceived as extra money that always comes in handy. Before spring 2015, bonuses were often used as a way to prevent a trader from making a withdrawal. Scam brokers were handing them out, and traders were accepting them without much thinking.

Unfortunately, some traders have received bonuses without their prior acknowledgement, so CySEC was forced to introduce a new set of rules. Read more on CySEC bonus rules.

Understanding the Bonuses

According to CySEC, no regulated broker is allowed to add a bonus onto trading account without prior written permission. This protected many traders, but not those who are trading with unregulated brokers.

For this reason, it is always recommended to trade with regulated brokerage companies like those on Top List.

Sometimes account managers put additional pressure on traders in order to convince them that bonuses are all nice and fun. Traders must always remember that they should have the final say.

Before accepting an offer read terms and conditions carefully and then make your decision. Things that every trader should pay attention to are:

  • Required trading volume or required turnover
  • Duration of the bonus
  • How the bonus affects deposit withdrawal?
  • How is the trading volume calculated?
  • How are the profit and loss calculated after the bonus is accepted?

Account manager and brokerage staff have a tendency to do all the convincing part via phone call, as it is harder to track what is going on, especially when it comes to scam brokers. For this reason, always insist on written correspondence via email. That way trader can take his time before making a decision, read all terms and conditions, and then, request an offer that can again be estimated for some time.

Keeping things in writing is a precaution in case something goes wrong anytime.

Bonus Terms and Conditions

bonusTerms and conditions are something every trader has to read, but nowadays when we are bombed with T&C for everything, it is easy for this important document to slip by. T&C is basically, an agreement on the behavior of trader and broker that must be obliged in every moment the trader is registered as a user on the platform.

Some brokers have Bonus Terms (known also as Bonus Rules, or Bonus Terms and Conditions) as a standalone document while other have it integrated as a part of general terms and conditions.

Bonus Types

Traders should keep in mind that there are several types of bonuses, and here are few that are the most frequent:

Initial deposit bonus or Welcome bonus

Bonus awarded when the trader makes the first deposit. The bonus amount is usually calculated in percentages, depending on the deposited amount. For example, 50% bonus on $250 deposit will be $125, so the trader will end up with $375 on the account. The required turnover is usually calculated like with any other Deposit bonus.

Deposit bonus

Bonus awarded on every next deposit made. This is also the best-known bonus and always has some required trading volume attached. It is mostly calculated by using the formula mentioned lower in the text. In most cases, the required turnover is between 20x and 40x.

No-deposit bonus

Bonus awarded prior to trader’s deposit, in order to make him more interested in the platform. This bonus usually comes in smaller amounts that enable execution of one or two trades in order to help the trader experience the platform. The bonus amount is not available for immediate withdrawal, as the trader has to reach the requested turnover, that can be somewhat higher (around 40x). There can also be additional conditions for profits withdrawal, like an active account with a deposit made before the request is processed.

Refer-a-friend bonus

Bonus awarded when the traded recommends a friend who makes a deposit. The amount is usually symbolic: it can be a unique amount of $ or a small percentage of the amount deposited. It can also come with additional specific rules or higher turnover attached. Before accepting it, make sure to understand what rules apply.

Risk-free bonus

This bonus is very rare and usually consists of risk-free trades, in most cases limited by the trading amount or time frame. This way, if the trader loses the money in those trades, the amount is not taken off the deposit, but covered by the broker. However, the profits made don’t automatically belong to the trader, but also require turnover in most cases.

Also, every promotion advertised by the broker has specific rules. It is hard to accentuate enough, that no trader should accept any type of promotion or bonus without a complete understanding of the rules applied. When it comes to respected and honest brokers, all bonus terms are usually found in one place, no matter the bonus type, so traders can easily make their decision.

How is the Required Volume Calculated?

Many traders don’t understand the basic principles of trading bonuses, and some foul brokers don’t even put any effort into explaining it to them. In most cases, trading volume is easy to calculate in case trader knows basic bonus terms. The formula for calculating the trading volume is mostly explained in bonus terms and conditions.

For example, the trader makes $250 deposit, and the broker is willing to add 100% bonus with a required turnover of x20.

This means that trader has $500 available for trading, but not for immediate withdrawal.  The withdrawal can happen only in case a required trading volume has been reached. In this case, the trader can withdraw bonus profit and deposit, only after the balance on the account is $5,250.

Deposit + Bonus x 20 = required volume

$250 + $250 x 20 = $5,250

When the trader has reached the volume, the amount (bonus profit and deposit) can be withdrawn. In the case, when the trader wants to withdraw funds before the required turnover has been reached he won’t be able to withdraw full amount deposited, but only the initial deposit amount with all invested sums deducted from the deposit. Let’s say that in case trader invested in two $25 trades and lost. This means, there are $200 left for his withdrawal.

True Stories on Bonus Scams

laptop giving moneyUnfortunately, every forum dedicated to the binary options has at least one topic opened by someone who has been scammed by accepting the bonus. And while their disappointment and rage are totally understandable, it is important to understand how honest brokers provide all necessary information on bonus rules. Most of them do not even recommend accepting the bonus in case the trader doesn’t take it seriously. Banc De Binary warned all traders about problems that occur with bonuses. 

Yet, there are many brokers who take advantage on people’s trust and are silent about bonus conditions. After traders try to withdraw their money, they find themselves standing in front of the wall, as broker often declines not only the withdrawal request but any type of communication too. You can read some stories on bonus frauds below.

LBinary: Unauthorized bonuses

One of the first scams we interacted with was LBinary after one reader wrote about her case. The trader lost $10,000 in a single night, as the broker traded in her name without prior approval, and to make things worse, even added an unauthorized bonus.

No matter how much she tried to convince her account manager and customer support to stop, it was impossible. There was no written proof of her accepting anything, and the broker simply took advantage of the customer. Find out more about this case.

MyOption: Impossible withdrawals

Some brokers, like MyOption, are trying to avoid talking about the withdrawal, in case the trader accepts the bonus. In this case, the trader got a bonus without knowing what the terms of bonuses are, and every attempt to contact the broker was futile.

Even after FBO tried to straight thing out, it was impossible to get any sensible answer. The trader was told that bonus can be canceled at any moment, and the deposit is withdrawn fully, but the reality was much different. Learn about it here.

Such stories repeat in media every now and then, as scam brokers are always around, and new traders join the binary fever each day. In order to protect your funds from dishonest brokers who operate under unclear conditions, make sure to select the broker that suits you. The most reliable brokers can be found on the Broker’s list. 

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