The binary options industry is a highly competitive industry for the brokers involved. To up the competition, brokers routinely offer different forms of perks to entice traders to choose the competition.
These perks may come in form of extra features, absence of certain fee types, bonuses, promotions etc. One such perk is risk free trading.
The bottom line of risk free trading is to offer traders the ability to make trades without risks. It is the perfect trading proposition making it an exciting trading opportunity for traders of all experience levels, especially beginner traders.
In any case, as is the norm in the industry, the brokers do have their respective terms and conditions attached to the offer. Some are more stringent than others are. Therefore, it is a good idea to confirm and fully understand the accompanying rules and regulations of a risk free trading offer before taking advantage of it.
What Is Risk Free Trading All About
In case you missed the details of risk free trading or think you’re not reading right because it seems outlandish, this section breaks the offer down to tidbits.
Now, in a typical binary option trade, you take a position. If the position ends in the money, you get your capital back and a nice hefty payout. If the position ends out of the money, you lose your capital (though sometimes, you may get some percentage of your capital back).
A risk free trade is a tad different. It follows the same methodology. If your position ends in the money, you would get your capital back plus the payout. However, and this is where things get interesting, if your position ends out of the money, you DO NOT lose your capital. The broker returns all of your traded capital to you in FULL.
This is the reason behind the ‘risk free’ in risk free trading. Therefore, regardless of the outcome of your prediction, you never get to risk your capital.
Advantages of Risk Free Trading
Anyone can exploit the risk free trading to great success in binary options.
Newbie/beginner traders can use risk free trades to get a better grasp of binary options trading without having to worry about losing money. If you are a beginner trader, you get to familiarize yourself with the market, the broker’s trading platform, and fine-tune the strategies you would later employ to gain consistent net profits.
Expert traders can afford to discard their stringent money and risk management strategies with the aim of making huge profits.
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Best Way To Use Risk Free Trading
Without the risk involved in binary options, you can afford to take highly risky opportunities that you would otherwise have passed up. Especially in regards to the amount you trade with.
Thus, it makes sense to make your largest investments under risk free trades because the wins will be huge, but your losses will be zero.
Limitations Associated With Risk Free Trading
It is important to note, at least starting out, that the limitations associated with risk free trading are not uniform across the industry. Same limitations that may exist with broker A may not exist with broker B.
With that said, brokers do offer limitations to check abuse of the offer. The common limitations include limits on the amount of money you can trade either per trade or in total, the availability of only a few types of binary options contracts, or limits on the number of trades you can make within a specific period.
Because limitations usually exist, it is important that you find out the specific limitations/rules/conditions attached to a risk free trading offer on a specific broker, before taking the offer.
Best Binary Options Brokers Offering Risk Free Trading
Validity Period: 7 Days (ONE week)
Amount Limit: First deposit amount or $5000 during the first week, whichever is greater
Minimum Deposit: $500
Withdrawal Limit: You cannot make any withdrawal request during the week when Risk Free Trading is valid. However, after the Risk Free Trading week, you can make a withdrawal request at any time.
- Platform is easy and simple to use
- Diverse array of assets including currency pairs, indices, stocks, and commodities
- Easy and fast deposits and withdrawals
- FULL mobile trading capability for trading on the go
- Top-notch support
- Provision of updated trading news thanks to a partnership with media giant Reuters
Be cautious with this broker. Cysec warns against it (more info here).
Limit of Number of Trades: 5 (FIVE)
Forms of Binary Options To Use With RFT: One Touch, Boundary, High/Low, Short Term. There are other more specialized forms including Touch/No Touch, High Yield, Above/Below.
Trade Time Limit: A range of periods from 60 seconds to 5 minutes
- Regulated broker
- Varied collection of over 100 assets including currency pairs, indices, stocks, and commodities
- Zero spreads, fees, commissions, or other form of hidden charge
- Simple and speedy trading platform
- Refunded losses will count as bonus which can be reinvested on any asset of your choosing
- You should confirm additional RFT requirements that exist, especially those that involve withdrawal
Limit of Number of Trades: 10 (TEN)
- Zero commissions, spread, or hidden fees
- Real-time trading signals are provided
- Boss Capital operates a fully featured Trading Academy geared towards providing the best guidance and information in binary options trading. Resources include training videos, eBook, and webinars.
- Excellent 24/7/365 support is available to resolve issues you lay and provide answers