You are making a payment to a company on the web – Read those T&C’s
The main reason why you should always read a broker’s terms and conditions is almost too ridiculous and obvious to even state, yet many people still don’t do it. It’s that you are sending money to a company on the Internet that often times is even located in a different country than you.
This should be reason enough to read the T&C’s. And this is not even necessarily valid for binary options only. This should be the case for any kind of payment or monetary transfer you make on the Internet.
Why people still don’t do it I have no clue. The idea is that all the complaints and misunderstandings between binary brokers and their clients could be easily avoided if traders would actually read the T&C’s.
Below you will find the most common issues traders face in case they don’t read the terms and conditions.
Not being able to withdraw due to bonus volume requirements
This is perhaps the top #1 most common issue people face. Traders after signing up for a broker will automatically accept a bonus but won’t read the bonus T&C’s first. Now, if they had read them they would have understood that he bonus always comes with certain trading requirements.
For example, if you deposit $200 and then get $200 in bonus money, the broker might only allow a withdrawal in case you have generated a volume of 30 times the bonus money, which is $6,000.
In case you are a complete beginner it might take a very long time until you meet this volume requirement and as such you will not be able to get a withdrawal.
Now you might ask why these bonus requirements even exist. They exist in order to prevent a situation where someone registers, makes a $200 deposit, gets a $200 bonus and then trades the $200 and in case the person loses it, he or she just withdrawals the initial $200 and walks away. This is called bonus fraud.
Every broker has such volume requirements. These requirements are always clearly explained in the brokers’ terms and conditions page.
If you accept a bonus before understanding how these requirements work, you will then later accuse the broker of scamming you when your withdrawal will be rejected.
Broker asks for proof of identity and you think it’s a scam
All legal and licensed binary options brokers are required by the law to verify the identity of their customers before processing a withdrawal. These laws are in place to prevent money laundering (i.e. someone registering at a binary broker to move money from country A to country B undetected).
Before processing a withdrawal, the broker will ask you to prove your identity such as address, name, etc.
If you haven’t read the T&C’s, you will accuse the broker of identity theft, whereas this measure is not something forced upon you by the broker but by international regulations and laws.
Trading rules and limitations
Oftentimes brokers will have certain rules in place in order to ensure a fair trading environment. For example, a broker might limit investments per trade of above $500 for certain accounts. These rules are often in place in case of beginners to prevent them to accidentally blow their account balance away.
However, due to the technical limitations of their trading platforms that most of the time were developed by third party companies and not by the brokers’ themselves, these limitations are not coded into the platform.
As such, you might still be able to execute trades larger than $500 even though this is against the broker’s rules. In case you break these rules and then make profits (fortunately this works for loses as well) the broker might then cancel your trade.
If you haven’t read the broker’s T&C’s you will then accuse the broker of cancelling your successful trades to scam you.
Limitations regarding jurisdictions and countries
Brokers are sometimes disallowed to accept traders from certain countries where binary options are either illegal or the brokers’ don’t have a license there. This does not always mean that you can’t register at those brokers.
If you register and deposit money at a broker that does not allow registrations from your country, your account can be blocked and you might not be able to recover your assets anymore.
Before you register at a broker, make sure that the broker does accept registrations from your country.
As you can clearly see, there are multiple reasons why you should always read the terms and conditions of a binary options broker. Not doing so could result in your account being blocked and your assets seized in certain conditions.
I believe that the overwhelming majority of all the complaints that brokers receive and all the un-pleasantries traders experience could be avoided if traders would just spend 2 minutes to read a broker’s T&C’s before registering and pulling their credit cards out.
So, make sure to heed this advice next time you register at a broker and you will see your life will be much easier. You will get your withdrawals processed much faster by understanding the withdrawal process in advance and you might make much better decisions such as whether or not to accept a bonus based on your trading goals.