Bonuses are as old as the trading stocks and shares itself. They are among the most popular ways to attract new online traders. And in some cases also for making the existing customers invest more to get a chance of additional results via a number of bonuses. Bonuses are much like a beautiful deception in this field. If the trader doesn’t have an in-depth understanding of the generic terms used for the offered bonuses, the investment in bonuses may be risky. As a matter of fact, most of the complaints of ‘scam’ arise from the misunderstanding of the terms and conditions of various types of bonuses offered by the broker.
An extensive amount of information, exposure and experience is necessary in order to open a live trading account and take advantage of the bonuses offered by the brokers. It is also highly recommended that you read straight through this article to further minimize the chances of being the victim of a possible scam or fraud.
Types of Provided Bonuses
In the online trading options bonuses there is an abundance of bonuses at hand. They can be broadly classified as follows:
- Investment Bonus: Also called Sign Up, Welcome or First Investment Bonus
- Reload Bonus: Offered to the traders making repeated investments
- Risk-Free Trading Bonus
- Investment-Free Trading Bonus
These bonuses are generally offered to the customers who are new and are making their first investment. It is only applicable if you do not have an account with the broker already. These bonuses can range anywhere from 25 to 50 percent for an average broker but some may offer as high as a flat 100% investment bonus.
Before claiming your bonus from any broker read the Terms & Conditions. Often there is a fine print, which obligates you to trade a certain amount before getting the right to withdrawal your bonus.
The reload bonus is mostly awarded to the trader making their second or more investment into their online trading account. Just like the investment bonuses, these bonuses work in the same way and vary among the brokers. The amount and method of the investment may also affect the amount of the bonus. The brokers mainly offer this type of bonus to traders depositing via eWallets.
As the name implies, such bonuses are offered to new traders for free. This is the rarest type of a bonus to be offered by a broker. The trader is required to make an account with the broker and verify their identity via an SMS or a government issued proof of the ID. Once granted, the bonus can be traded but it can only be withdrawn after the fulfillment of a required turnover. Which generally is in a bigger amount than the other types of bonuses. Some of the brokers may also require the trader to invest some amount in the account before receiving the bonus. After that the achieved results may be requested for withdraw.
General Terms and Conditions of Bonuses
The general practice exercised in investment bonuses is the requirement of a minimum trading turnover before a payout can be requested. This turnover amount varies broker to broker and is generally 10-40 times the amount of the bonus.
Instant Bonus and Release Bonus
The investment bonuses described above can be classified in two categories. When comparing both the Instant Bonus and Release Bonus one can notice a couple of differences. Instant Bonuses are released directly to the trading account. If the investor sends a withdrawal request before the fulfillment of a trading volume – the bonus will be canceled. Therefore, this kind of premiums are more suitable for experienced traders.
Newcomers, on the other hand, can make excellent use of Release Bonuses. However, they must have in mind that these are release only at certain intervals. The agreed trading volumes have to be completed so that this can happen. But they can be requested at any time. Only the investment and not the bonus is canceled.
Bonuses – Are They Really Beneficial?
After knowing the Terms and Conditions and the pros and cons of the bonuses, it totally depends on the trader whether or not to put them to use. With most of the trading brokerages, it is compulsory to request for a Sign Up Bonus. This means that the trader has read and understood all the Terms and Conditions of the bonus offer. Some of the traders also prefer using the bonuses as a source of increasing their account equity and hence getting a chance to generate enhanced benefits.
While some others simply consider the bonuses to be a fraud and do not avail any of them. To get the full advantage of these bonus offers, it is a good practice to carefully read through the Terms and Conditions of the bonus offers before accepting or rejecting them.