A 50% credit on a £2,000 deposit reads like £1,000 of free capital. It is not capital. It is a conditional liability with a volume price attached, and whether it is worth anything to you depends on one piece of arithmetic that the offer page almost never displays.
That calculation takes about four minutes. Most people never do it, which is precisely why the offers exist.
Three structures that behave nothing alike
The word covers at least three quite different arrangements, and they carry entirely different consequences.
A non-withdrawable credit is added to your account balance and counts towards margin, but can never itself be withdrawn. You can trade on it and keep profits generated with it, subject to conditions. Its practical effect is to let you hold larger positions than your own money would support.
A withdrawable bonus subject to turnover becomes real money once you have traded a specified volume. Until then it sits on the account as a number you do not own.
A volume rebate returns a portion of your spread or commission after the fact, usually per lot traded. This is the only structure of the three that reduces a cost you were going to pay anyway, which makes it the least distorting of the three, though also the least dramatic in a marketing headline.
Confusing the first two is expensive. The arithmetic behind forex bonuses of the second type is rarely printed anywhere near the headline figure, and it is where the real price sits.
Doing the turnover sum
Conditions are usually expressed as required lots per unit of credit. Take a common shape: £1,000 of credit, released at 5 standard lots per £100. That is 50 standard lots of required volume.
Now price that volume. On a major pair with a typical all-in cost of 1.2 pips, and a pip worth roughly £8 per standard lot on a sterling account, each round turn costs about £9.60. Fifty lots is therefore around £480 in transaction costs.
So the offer is not £1,000. It is closer to £520, and only if you trade those fifty lots at exact break-even, which nobody does. Add a realistic spread of outcomes around break-even and the expected value drops further.
Run the same sum on a strategy that trades wider-spread instruments and the figure can invert entirely. On an exotic pair at 12 pips, fifty lots costs more than the credit is worth. You would be paying for the privilege of receiving it.
The cost that doesn’t appear in the sum
The transaction cost is the visible part, and it is not the part that does the damage.
Volume requirements change behaviour. A trader who would normally take three or four setups a week starts taking eight, because there is a target to clear and a deadline attached to it. Position sizes creep up for the same reason. Trades are held less carefully, because the point of the trade has quietly shifted from making money to generating turnover.
This is the actual mechanism. Not the spread on fifty lots, but the fact that fifty lots is more volume than the strategy was ever meant to produce, executed under time pressure by someone who is now measuring the wrong thing.
If you are considering an offer, ask yourself a blunt question: would I be placing these trades if the condition did not exist? If the honest answer is no, the condition is not a hurdle to your plan. It has replaced your plan.
Read the withdrawal clause first
Read it before the headline. It is where the substance is.
Typical terms void the entire credit if you withdraw any of your own funds before completing the volume requirement. Some go further and remove profits attributed to the credit portion. The practical effect is that accepting the offer locks your deposit for as long as it takes to clear the turnover, which may be considerably longer than you expect once real market conditions intervene.
Two more questions worth asking in writing:
Does the credit count towards your margin level calculation? If it does, your stop-out threshold is being computed partly on money you do not own. When the credit is removed, your margin level can drop instantly without the market having moved at all.
What is the expiry period, and what happens to open positions when it lapses?
The UK position
There is a reason UK retail traders see these offers less often than traders elsewhere. Under FCA rules, firms are prohibited from offering monetary and non-monetary inducements to retail clients in connection with CFD trading. The regulator’s view is that such offers encourage exactly the behaviour described above.
If you are a UK retail client and an offer of this kind is placed in front of you, that fact is itself information about the venue and its regulatory footing. It is worth pausing over rather than treating as a windfall. Check the firm’s authorisation status directly on the FCA register before you deposit anything at all, not after.
The number that actually decides your outcome
For anyone trading with any regularity, ongoing cost dominates one-off incentives, usually by a wide margin. The comparison is easy to run and almost nobody runs it.
Take a trader placing twenty round turns a month at one standard lot. At an all-in cost of 1.4 pips, each round turn costs about £11.20, so £224 a month and roughly £2,690 a year. At 0.9 pips all-in, the same activity costs about £7.20 per round turn, £144 a month, roughly £1,730 a year.
The difference is around £960 annually. That is comparable to the entire headline credit in the earlier example, except that it recurs every single year, requires no conditions, locks nothing, and does not tempt you to trade a volume you never intended to trade.
Work out your own figure. Average round turns per month, multiplied by your all-in cost per round turn including commission, multiplied by twelve. Then hold any promotional offer up against that number and see how it compares.
What to compare instead
If you are choosing between venues, the durable variables are unglamorous and easy to verify:
- All-in cost per round turn on the instruments you actually trade, at the times you actually trade them, including commission and overnight financing
- Published execution statistics: average slippage, rejection rates, fill quality around data releases
- Deposit and withdrawal timelines and fees, tested with a small withdrawal early rather than discovered later with a large one
- Where client money is held, and what the dispute process is if something goes wrong
- Whether the platform and instrument range match what you need, without workarounds
None of these will ever be the largest text on a landing page. All of them will still be affecting your account in three years’ time, which is more than can be said for a one-off credit with a turnover schedule attached.
Trading leveraged products carries a high level of risk and can result in losses that exceed your deposits. Past performance is not a reliable indicator of future results. This article is educational and is not investment advice.
