Making Sense of Binary Options Broker Promotions

With so many binary options brokers competing to acquire new clients, there are plenty of promotions and gimmicks designed to make a broker look more attractive to an investor searching for a home, but you can check out a 24option review. Some of the more common include sign-up bonuses which promise to add money to your initial deposit so you have a much bigger starting capital to work with as well as higher payouts for each transaction. To the newbie not familiar with the ins-and-outs of the business, these are very attractive promotions; but are these really the end of the story or is there a catch that one should be familiar with before committing to a specific broker?

The truth is actually a little bit more complicated. First up, any options investor knows that brokers do not charge fees for the services that they offer. These brokers primarily profit when you place an investment and it falls out-of-money. The bad way to put it is that brokers are essentially “the house” and you are the gambler; the more you lose, the more the house profits from your losses. It is therefore in the best interest of the broker to keep you tied to their service and to motivate you to make as many trades as possible in order to increase the likelihood that the house gains a net win.

Binary options brokers primarily do these in two ways:

  • One, when you sign up to a broker and avail of the promotional bonuses being offered, more stringent requirements prior to withdrawal kick into place. The specifics are hard to determine exactly but by some accounting, a $300 bonus added to your initial deposit requires that you make about $20,000 worth of trades before you can begin withdrawing your profits.
  • Two, long processing times for withdrawals are also fairly common with shady brokers. In some cases, investors will have to wait two weeks to a month before they get their money. The basic concept here is that as long as you haven’t received your withdrawal, the broker can use it as running capital to fund its many affairs.

Now, it is wrong to think that all brokers behave like this because the truth is that there are also credible and serious brokers who operate on fair terms. The challenge is to spot these brokers in order to work with them rather than those who are only out to profit from your losses.

Likewise, you can take some steps to make sure you insulate yourself from all these potential problems. For starters, do not accept the offer for a sign-up bonus if you don’t know the consequence, and there will always be a consequence for every bonus that you avail. Second, reading reviews from other users can significantly help you identify which brokers pay up on time and which ones take eons before you get your money.

Again, not all brokers are equal so it is important to take the time and effort to compare brokers so you can find the one that’s best for you. Never trust a broker just because there are great promotions and bonuses on offer. You will profit more from successful trades than from the additional $300 sign-up bonus that brokers offer; keep this mind so you can always put your investment first and push the allures of promotions and bonuses to the side.

7 Responses to “Making Sense of Binary Options Broker Promotions on “Making Sense of Binary Options Broker Promotions”

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