You might not realize it …but …binary options trading is a lot like gambling.
Okay, it’s actually worse. Here – I’ll give you an example to show you what I mean.
Say you want to play roulette. And you’re the type of person that likes to bet red or black, or even or odd. You know, a coin-flip.
The outcome is 50/50, but the odds sure aren’t. Meaning, in the long run you’re not going to breakeven on this game.
Do you know why?
It’s because the casinos skew the odds in their favor by adding a 0 or 00. If the ball lands on one of these numbers, or the opposite of what you bet on, you lose. It’s those zeros that give casinos a small edge of around 5-7%.
Well, guess what? Binary options kind of works the same way.
Even though the outcome is 50/50 (unless you have knowledge others don’t), the price (odds) you’re getting isn’t. The reason why is because the casinos take 100% of your money when you lose and only give you a 60-95% profit when you win.
Assuming your trades went like win-loss-win-loss-win-loss, you’d finish at a slight loss. That’s the risk you take trading binary options, though.
But what if I told you there’s a way to offset that advantage? Not get rid of it completely, of course, but to line your pockets with an additional 10, 15 or 20 percent.
Would you be interested?
Then let’s talk cash back – an offer many brokers make. They pay you a percentage of your losses, usually up to 20 percent. In turn this increases your overall payout (the money you make trading).
Want to know who offers the highest cash back?
Binary Options Brokers Who Offer Cash Back
Want to find a broker who offers the best cash back?
Here you go:
- 24Option – Get an additional 6% with a Diamond account.
- TradeRush – They offer rebates as high as 15%.
- Porter Finance – Get up to 10% cash back.
- OptionFair – Get up to 5% cash back.
We chose these brokers based on the cash back they offer while trying to keep in mind their overall payouts. It does you no good to sign up somewhere with 20% cash back, but only a 65% payout if you can just sign up somewhere with a 90% payout.
How Binary Options Cash Back Works
Here’s how the cash back works.
Say a broker offers a 70% payout and a 15% refund on your losses.
When you win, you get 70% or $7 for every $10 you spend. Your total comes out to $17.
When you lose you usually get nothing. Except for when you have cash back.
Say you have 15% cash back. In those cases you’ll get $1.50 for every $10 you bet when you lose.
Assuming you’re making binary trades (where the outcome is 50/50), this increases your payout to 85%. You’re only losing $1.50 for every $10 you bet.
That’s the general idea.
You’re still not profiting in the long run, but this does a couple of things for you:
- Cuts your losses in half. We’re looking at the glass half full instead of half empty.
- You decrease the times you have to win to breakeven. You get the odds closer to a true coin-flip.
- You earn a free bet every 6-7 trades.
The bottom line – you give yourself more chances to win money. Especially in the short game.
That’s certainly nothing to complain about.
The Other Type of Cash Back
There’s another type of cash back I want to tell you about.
Okay, okay – to warn you about.
If you Google “cash back binary options” (or something similar) you may come across a few websites who offer cash back, but only if you sign up to a broker through their website.
To be clear – these deals are (usually) offered by the website, not the broker. And this is why you need to be cautious. Let me tell you why.
Here’s how this works – when the website refers you to a broker they will receive a commission if you fulfill the requirements (make a deposit and make so many dollars worth in contracts/trades).
Once you do that the website will receive a commission. Around $250-$300. But custom deals can fetch far more money.
From here it’s a simple math problem.
The website bribes you with a free $100 if you sign up and make a deposit. They make $250 for every person that does.
They spend $100 to make $250 – or $150 profit.
Sounds good, right? But here’s the problem…
These deals aren’t usually okayed by the broker. So it’s possible they find out and stop the deal, in which case you don’t get your money. It can also screw up your account down the line, especially if that broker severs the relationship with that website.
And in working with that website you also pass up on any real perks the broker or some other legit website offers you.
The moral of the story? If the cash back offers seem too good to be true, it probably is. If you decide to work with one of these websites I highly recommend you reach out to the broker to make sure they don’t have a problem with it first.
Once you know the deal is legit, have at it. And if not?
You can just sign up to one of these broker-approved deals we have for you above.