Did you know that some brokers reimburse a percentage of the invested capital in case of loss (usually 15% ) ?
Probably yes, but perhaps many of you underestimate this great opportunity because in general , a broker which reimburses part of the losses is charged 70 %, while the brokers that do not reimburse pay between 70% and 80% .
We will demonstrate , however, that the reimbursement of the broker is cheaper.
First of all, you invest to make a profit , not to lose your money , but no Trader guesses the 100% of its predictions. A good trader keeps in mind that you can not close all positions in profit , so some of these will end up necessarily a loss. Obviously, to stay active just close in a number of positive steps that can cover the losses.
That said, ask yourself this question :
Are you a good and experienced Trader, or do you have some way to go and much to learn ?
If you were already fully formed Trader you would not be here reading the information on this site .
If you are here is because you are inexperienced or , or because you still need to complete your education.
In this case, then , you have to take into consideration that a number of investment inevitably ends up at a loss. Now the question is :
Is it better to lose 100% of the capital invested in a single operation , or to lose only 85% of that operation ?
The answer should be obvious.
A Trader novice or beginner completely lose much more often than a seasoned Trader , therefore, need to work with a broker who offers him a chance to recover at least part of the lost investment.
But let’s see a practical example by comparing two brokers :
The broker A ( AnyOption we recommend that pays 70% and will always reimburse 15% )
The broker B which usually pays between 75% and 80% but without reimbursement ( such as one of those that we reviewed in the BrokersBinary Brokers options section)
Suppose to open 10 options $ 50 each, 5 we close them into profit and 5 in loss in.
For 5 positive investment gain :
70% for each Trade with AnyOption , so $ 35 x 5 = $ 175
80 % with other brokers then $ 40 x 5 = $ 200
In total , therefore, we have invested $ 250 in both cases , but made 425 $ (175 $ +250 $) with anyoption , and 450 $ (200 $ +250 $) with the broker B.
For the 5-lost positions with the broker B lose a total of $ 50 x 5 = $ 250
For the 5 lost positions anyoption gets a refund of 15% of the capital invested , therefore, $ 7.5 x 5 = $ 37.5 .
Due to 5 lost positions would have to lose $ 250 , but anyoption refunds us $ 37.5 , so we actually lost $ 212.5
Let’s Do The Maths
With the Broker B :
Total investment $ 50 x 10 = $ 500
Total Revenue $ 450 + $ 0 = $ 450
Overall loss of $ 500 – $ 450 = $ 50
With AnyOption :
Total investment $ 50 x 10 = $ 500
Total Revenue $ 425 + ( $ 37.5 reimbursement for losses ) = $ 462.5
Overall loss of $ 37.5
As you can see, with anyoption we lost only $ 37.5 compared to $ 50 lost with the broker B
And if we Predict 6 out of 10 Trades ?
Always assuming the same percentage as the previous example , with anyoption we obtain the same results as the broker B, then the broker B becomes cheaper than anyoption.
We hypothesized that the broker B pays 80% , but this fee is not fixed , the return paid by the broker varies depending on the chosen cross , sometimes it is also recognized 85% , in other cases , more often 70 -75% , so in reality the use of the broker B becomes cost-effective only for very good and experienced traders can trade on to win 8-9 10 .
If you think you still have to learn and you are not able to correctly predict at least 7-8 out of 10 Trades , then the best choice is a broker with reimbursement on losses. If you are really good , better then a broker who pays the most .