Investing in binary options requires various strategies to attain profits in every trade. Classic trading with binary options requires traders to choose from different kinds of assets which are stocks, currencies, commodities, and indices with basic options choices. Those choices include high/low, range/out-of-range/touch/no-touch where traders agree on the length of the option period, essentially choosing the expiry time and wait for it to end. Before, it was not possible to change a trade once it was made, but since innovation is also a part of binary options, brokers can now offer an early exit strategy which you can close the option before the expiry time.
Importance of Early Exit Strategy
Profitability is just one of the main goals in binary trading. You should also prevent losses in your investment or at least lessen them. You can avoid or reduce your losses if you close a trade early. For example, if an “out of the money” trade would result in an 85% loss, exiting the option early might result in a considerably better outcome, like a loss of only 30% - 50% vs. 80%. It will still vary in the current market condition when the option is bought back. An early exit increases trading flexibility because it gives every trader options vs. waiting for the expiry time and watching their losses grow when their investment moves opposite of the preferred direction. Another advantage is that the early exit option releases money that traders could use to buy more binary options. Despite the mentioned advantages, there are also other factors that need to be considered while using this option. Continue reading "Binary Options Early Exit Strategy"