Is Accepting a Broker Deposit Bonus Risky?

Question

I've heard that accepting a broker deposit bonus can be risky. What are the potential downsides to using these bonuses?

Answer 1

Accepting a broker deposit bonus can be risky because it can lead to indebtedness if treated as actual owned money. The bonus is just a credit and can encourage traders to use more leverage, which increases risk. Additionally, the bonus can complicate risk management by affecting how much you're actually risking per trade if your trading software factors the bonus into your equity. This can lead to over-risking. Moreover, meeting the high trading volume requirements to convert the bonus into cash can be difficult and may not be worth the effort for smaller accounts.