Binary Options No Deposit Bonus

What is a Binary Options No-Deposit Bonus?

A binary options no-deposit bonus is a cash award given by a broker to a trader, and which is deposited into the traders live account without requiring the trader to first make a deposit. This distinguishes this bonus from the regular deposit bonus, which requires the trader to first make a deposit into a live account in order to qualify for it.

The name of the bonus gives it all away: it is truly a bonus that requires “no deposit” from the trader before it is awarded.

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Why a Binary Options No-Deposit Bonus?

The first bonuses were seen in the forex market towards the tail end of the last decade. They were used mainly as a means of incentivizing traders to open and fund accounts for trading. When the binary options market kicked off in earnest, the deposit bonus concept was copied and many binary options brokers began to offer them. However, the binary options market encountered difficult times in the years extending from 2010 to 2013, with so many unregulated brokers hitting the market. Many of these brokers began to abuse the bonus concept. Rather than use it as a way of boosting trading capital, these scam brokers chose to use them as a means of denying traders the opportunity to make money in the market by imposing impossible volume requirements before withdrawals could be made. Bonuses gradually began to lose their appeal and soon after, it became clear that something else needed to happen.

The first binary options no-deposit bonus was offered by now-defunct iOption, followed by GTOptions and then a few other brokers. The concept was to allow traders to have small amounts of money credited to their live accounts by the brokers without requiring any prior deposit on the part of the trader. This was the beginning of the no-deposit bonus; binary options would never be the same.

With a no-deposit bonus, binary options traders do not need to make a prior deposit. There is no need to worry about deposit methods, and you get to learn how to make money with binary options.

Characteristics of the Binary Options No-deposit Bonuses

The no deposit bonus binary options traders are provided with today usually come through signing up with affiliate partners of the brokerage firm. But what are the characteristics of the binary options no-deposit bonuses?

  • Most of the binary options no-deposit bonuses are in amounts that do not exceed $100.
  • They are usually accessed as part of special sign-up offers. Most of these offers come from affiliate partners and not from the binary options brokers themselves.
  • The no deposit bonus for binary options traders can usually be accessed just once from each broker.
  • There are also brokers who decide to offer the no-deposit binary options bonus along with cashbacks. Cashbacks are usually a return of any money lost during a real money trade, usually for the first few trades that are undertaken. In other words, cashback trades are essentially free trades.
  • The bonus is for trading purposes only and cannot be withdrawn from the account using any of the withdrawal/deposit methods already selected by the trader.

Uses of the Binary Options No-Deposit Bonus

There are several ways to which the binary options no-deposit bonus can be put to use. Some of these are listed below.

  1. To provide a smooth transition from demo trading to real money trading.
  2. They provide a means to gradually grow capital with zero-risk to the trader.
  3. They provide an environment for traders to learn about money management and how to use the minimum trade amounts effectively.

How do these play out for the trader?

a) Transiting to Real Money Trading

Too often, the literature and resources out there will tell a trader who is brand new to the market to simply make the transition from demo trading to real money trading. The fact that there is a very high percentage of traders making this sudden transition and blowing their first accounts shows that there is something radically wrong with this approach. The answers are not too far away. We only need to look at other offline professions to see how the transitions are made: doctors, mechanics, engineers, pilots, you name it. Do you ever see a doctor on internship being plunged straight into doing major surgeries on patients? You would not see such a thing being done in sane climes. So what makes anyone think that binary options should be any different?

There has to be a period of transition from the demo account to a real money account. The way to do this without the traders risking their own funds is to get allocated a small amount of money by the broker, which can be used in a real money account to actually test the waters of live account trading. This produces a smoother transition for the trader, especially if done under the tutelage of an experienced trader.

b) A Means of Growing Capital

There are traders who may not have access to a large pool of funds for trading. Theoretically, it is possible to attempt to grow the capital provided in a binary options no-deposit account to something sizeable, even though in practice, this could take a very long time and most traders are not patient enough to work towards achieving this.

c) Money Management

A lot of traders get turned off when they are told about money management. They only want to know about the latest robot or the latest strategy that can deliver lots of profit. But what they don’t know is that the market is not all about making profit. A large component of staying alive in the financial markets is about preserving capital when market conditions turn against the trader. Every trader will experience these periods of adversity. So how is capital preserved during these periods? It is through sound money management.

What does a binary options no-deposit bonus have to do with money management? It has a lot to do with it. Learning to apportion money from a small account to trades is best done using a no-deposit bonus. Every broker has a minimum trade amount. In order to comply with money management best practices, the trader has to learn how to match the minimum trade amount to the total no-deposit bonus in such a way that the exposure of the trader to the market in open positions does not exceed 3-5%. This is money management in action.

How to Use Your Binary Options No-Deposit Bonus

Having understood the nature of the no-deposit bonus that are available for binary options traders, it is important to understand how they should be used in order to get maximum benefit.

First, you should understand what purpose the no-deposit bonus serves you. As a new trader, your main focus should be to understand how trading real money on the binary options market works. The no-deposit bonus binary options traders are awarded should therefore be used to get a feel of the real money market. In the aviation industry, pilots usually move from simulator training to actual short training flights under the mentorship of experienced flight instructors. This approach should be the guiding light for new binary options traders as far as binary options no-deposit bonuses are concerned. The new trader should ideally start using the trading account to understand things such as:

  • The ideal market to trade.
  • The nature of the various prediction option contracts such as In/Out (Boundary or range options), Touch/No Touch, etc.
  • Studying the deposit methods such as digital wallets (Neteller, Skrill, etc).
  • Understanding the step-wise process of setting up trades.

Secondly, you can compare two brokers offering the no-deposit bonus and see which one delivers the best trading experience. Of special importance is to understand what kind of trading platform is offered by the broker. There are different types of platforms currently in use in the binary options market. A trader may find one platform difficult to use and yet find a competing platform much easier. By being able to compare two brokers with different platforms using real money from the no-deposit bonus, traders can quickly determine which platform they will like to use on a much larger scale going forward.

Conclusion

There is no limit to the number of brokers offering a no-deposit bonus that the binary options trader can test out. It is possible to claim your no-deposit bonus from each of the brokers that we will be listing out below. Claiming your bonuses or cashback will require specific steps which differ from broker to broker. Make sure you read the terms and conditions attached to the award of the binary options no-deposit bonus you will be signing up for.

FAQ’s

Q: What is a no deposit bonus?

Answer: This is a great way to try out a brokers offering without actually having to deposit. It’s an equivalent to a demo trading account as it means you can have full functionality to the brokers platform and services. The broker places some funds into your trading account which you can use to trade with. You will not be able to deposit these funds though.

Q: What are the benefits of a no deposit bonus over other bonus types?

Answer:

  1. They provide a smooth transition from demo trading to real money trading.
  2. They provide a means to gradually grow capital with zero-risk to the trader.
  3. They provide an environment for traders to learn about money management and how to use the minimum trade amounts effectively.

Q: What other bonus types exist?

Answer: A lot of brokers offer a welcome bonus and a redeposit bonus. A welcome bonus is where the broker matches your deposit by placing extra funds into your account. eg. 100% welcome bonus means the broker will match your deposit up to 100%. So if you deposit $1000, the broker will put $1000 into your account to trade with. A redeposit bonus similarly is where a broker will place a percentage of your deposit into yoru account ot increase your trading capital eg. if you redeposit $1000, the broker may place an additional $300 inside your account. Bear in mind it does come with conditions, such a s a certain minimum trading volume before you may withdraw these funds.

Binary Options No Deposit Bonus
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