Many people are interested in binary option trades, but they wonder just how long the trades can take place. Many of the more common binary option trade time periods last one to five minutes. However, there are other trade lengths also. These will certainly suit different traders who need more flexibility. Here are some in-depth tips regarding the binary trade option time expiration’s.
Binary Options Have Value upon Expiry
This is different from traditional options which can have value before they expire. Binary options trades are final so you cannot sell them before their expiration. This means that a trader cannot sell a position. He or she must hold it until it expires. There are no exceptions.
Before entering a trade like this, consider the time of expiration. A trade has to be in the money requested at the exact time of expiration in order for it to be of value. This means that binary options have value only until their expiration.
Traders Prefer Short Binary Option Trades
The binary option industry is made for those who crave instant gratification which runs contrary to investors who believe that patience is a virtue. Brokers will tempt traders with trades that are about to come up in as little as 30 seconds.
A trader can make 80 percent profit in less than a minute which sounds awesome. It can be, but unless that trader has a system or can read trader speak right, they need much more than 30 seconds.
If you are like a lot of traders who do have a predictable system or read, then you still have to be sure that you are sizing trades and positions properly. Be careful when taking several positions in a short period of time. You can make lots of money fast, but you can also lose it fast. Be sure you can trade carefully and do so yourself in a short period. Don’t rely on the readers!
The Average Length of Trades
The most common time period is one to five minutes for most all binary options trades. Some time frames may last up to a half hour or one hour, however.
Brokerages display the time period on each trade. However, it is up to the trader to monitor these time periods and know that they are entering any particular trade during the proper time.
Longer Time Frame Trades
Ask your brokerage about longer time frames for binary options. Some will let you trade up to a month or longer. Before you enter into this type of binary trade, make sure that you realize your money will be tied up until this date arrives.
You cannot sell a binary option position once you enter into it. A binary trade can be great for someone who has total confidence in the direction a particular security is going over an extended length of time. As the trading of binary options expands, it is believed that the trades of longer time period binaries will be made available.
Currently, foreign currencies get the longest trade time periods. This is because foreign exchange traders usually do not have a short-term estimate on the direction of a specific currency. However, based upon macro-economics, these traders may have more conviction on long-term trades.
Foreign currency trades are most common for long-term binary option trades. They may also be offered in commodity trades like that in oil, precious metals and in other stocks.