Expiry times are one of the most important aspects of binary options. Traders who understand how to find the perfect expiry times for their trades will make a lot of money. Traders who lack this skill will end up broke. This article will help you to be on the right side of this line.
In this article, you will learn:
With this information, you will understand everything about binary options and expiry times, and you will be able to use the right expiry times to improve your trading.
The expiry times of binary options define the time in which your prediction has to come true. While binary options always use the same term – expiry times – there are two different types of expiries. Those are:
The whole process is simple. With confirmation expiries, you predict where the market will be at a specific point in time. With deadline expiries, you predict that the market will do something within a time span.
Bot predictions are similar but different. Some traders might do better with the one type than the other. We recommend to try a few different strategies and find out for yourself which trading style you like best.
Expiry times are the most important part of trading binary options. Assume that you are investing in a high option, for example. The underlying asset will eventually trader higher than now. Predicting that the market will rise is not the difficult part. The difficult part is predicting when it will rise. It might start immediately, and it might take a little while.
When you invest in a high option, the difference between winning and losing the trade is the expiry time you use. With an expiry of 30 minutes, you might win the trade, but win an expiry of 60 minutes, you might lose it.
Traders have long neglected to study expiry times. They believed that if an asset rises, any expiry will win them the trade. This is not true. The market rarely moves in a straight line; it moves in trends that take two steps forward and one step back. When you invest in rising prices during an uptrend, you might still lose your trade if you choose the wrong expiry time and run into the one step back. Similarly, some traders might use an expiry that is too long, which would mean that the current trend is over by the time their option expires.
When you trade options with a deadline expiry, for example a one touch option, expiries are important, too. To win a one touch option, the market has to touch the options target price. Longer expiry times use target prices that are further away from the current market price than shorter expiry times. It is important to give the market enough time but also keep the target price close. Experience will help you find the right mix.
Pay attention to the expiry you choose, and you should be able to avoid these problems. By reading this article, you have already taken the first step.
The unique advantage of binary options is the shortness of its expiry times. Banks have long offered assets that allowed for payouts of 70 to 80 percent on predictions about an asset’s price, but these assets have used expiry times of months and years. With binary options, you can make the same profit in a fraction of the time.
There are three types of expiry times for binary options:
While all brokers offer short to medium brokers, not all brokers offer ultra-short and long-term expiry times. Some brokers try to offer a little bit of everything; some specialize in a special time of expiry. To find the ideal broker for you preferred type of expiry, we recommend taking a look at our broker top list, where we compare the best brokers and their features, making it easy for you to find the broker that offers the expiry times you are looking for.
Binary options allow you to choose your expiry times in two ways:
Both types of expiries are essentially saying the same thing in a different way. Most traders will do equally well with both systems, but if you have strong feelings in one way or the other, you should check which type of expiry a broker uses before you sign up.
On the surface, it might seem like all expiry times are equal. Just pick the one that fits best, right? Unfortunately, things are a little more complicated.
Depending on your expiry, you will have to analyse different time frames, and different time frames require different strategies. For example, it would be a bad idea to trade a binary option with an expiry of 30 seconds with the same strategy that you used for an option with an expiry of 1 year.
To explain this connection, let’s look at the unique challenges of each time frame.
Your strategy determines the range of expiry times you can use. Before you decide on your strategy, you should, therefore, think about which expiries you would like to trade.
Consider these aspects in your trading, and you will be fine.
Not so long ago, your expiry time was fixed once you invested. This makes sense because the basic premise of binary options is that you predict what will happen at a specific time. Nonetheless, some brokers have recently started to offer option types with variable expiry times.
These option types work just like a regular high/low option. You choose an expiry time and predict whether the market will trade higher or lower at this point. After you invested, however, you are not forced to sit and watch. You can actively influence what is happening to your trade.
You have three options:
With these options, you are still not completely flexible in choosing your expiry time, but you have a lot of options.
Some traders consider these options unnecessary; some consider them to be the Holy Grail. There is no right or wrong in this question, and you have to decide for yourself whether these options are important to you. To find a broker that offers these options, take a look at our broker list.
Binary options success means managing your expiry times well. You have to choose the right strategy for your expiries and the right expiries for your strategy, and you have to choose the right expiry for the movement in which you invest.
The most important ingredient to finding the right expiry time for your trade is experience. With this guide, you have made a big step in the right direction. Take a look at our comparison of brokers, and you will also find the right broker.