Expiry Time Types for Binary Options
Attitude is clearly one thing that every binary options trader must consider in performing trades. The attention that should be given to market sentiment varies from asset to asset, and trading instrument being utilized. There are many factors that weigh in the decisions that binary options traders make that pertain to the marketplace. Expiration time is most definitely a factor that will have a big effect on binary options trading. Subsequently, trading must not be based completely upon numbers, as binary options traders need to have a feel of the market, and himself, to make the right choice.
Many binary options traders make use of different expiry times as part of their strategy. Binary options brokers offer a variety of expiry times, from as short as 60 seconds, to as long as a weekend trade. The difference of these expiry times play a significant role in the amount of profit that a binary options trader can obtain, and the amount of investment and risk involved. When traders opt for longer expiry times, the returns can be more profitable, but the risks are also greater.
It is important to choose expiry times carefully. Most binary options traders, especially those who are new to trading, choose expiry times arbitrarily. However, as they get the hand of trading binary options, they soon learn the importance of choosing the right expiry time for their investment, in accordance to their trading styles. Those who want to feel the rush of earning huge amounts of profits in a short span of time choose shorter expiry times, but their risks are also increased by some factor.
Knowing when to post a trade and what time to choose is something that a trader learns over time. Binary options brokers offer a variety of charting tools that allow the trader to make informed decisions and make significant profit. We are dedicated to helping you.
Expiry Time Divisions
New binary options traders often ask “What specific chart timeframe should I be focusing on?”. There are different expiry times provided by different binary options brokers. Here are some of the most popular times included in many platforms.
- 60 secs
- 2 mins
- 5 mins
- 15 mins
- 30 mins
- 1 hr
- end of day
- 1 week
- 1 month
It should be noted that lockout periods range between as low as 2 or 3 minutes up to 15 minutes depending on the asset choice and the type of trade. A binary options trader may be trading 30 minute expiries, but the lockout is 5 minutes, so the trader is actually trading in a 5-minute trade, not a 30 minute trade.
When entering trades with short expiry times, the binary options trader needs to research marketplace sentiment very carefully. One situation for a short time period may be when marketplace conditions are optimistic, or perhaps pessimistic. Binary options expiration times may be as short as one minute. It should be worth noting that this is probably not enough time for a significant changes in price values to happen. Nevertheless, whenever making use of shorter expiry times, it is important to know the returns and risks that go with it,
Expiry times that last anywhere from one day to a week, or longer will demand a different kind of attention from the trends in the market. When trading binary options using these expiration times, the primary focus must consider all market trends within the past few weeks. As with any perception on expiry times and other binary options factors, there are no guarantees that reversals won’t happen prior to the expiration time. However, it should be deemed useful to see if marketplace conditions have persisted in being either bullish or bearish within a considerable time period, as this is viewed as a very robust signal.
Viewing Charts for Expiry Times
The charts you use in different binary options platform should adhere to the expiry times that you chose to trade in. Experience binary options traders use two (2) chart timeframes lower than the expiry time. The reason behind it is this: One timeframe lower than your expiry allows you to see the current price and how far away the expiry is. It therefore helps you to determine how much leeway your trade has before expiry. Using two timeframes lower than your expiry will give you the precision and accuracy on the trade entry, increasing your leeway.
For example, a binary options trader trades 15 or 30 minute expiries. For the 15 minute expiries, the trader uses 1 or 5 minute chart timeframes, and 5-minute or 15-minute chart timeframes for the 30 minute expiry.
As a general rule, when binary options traders are in doubt, zooming out gives that trader the bigger picture. More often than that, binary options brokers’ charts are zoomed in too closely. Focusing only on the past couple of hours of data is a common mistake that binary options traders do. This could be analogized to a horse with blinders who is only able to see a limited view of the current price trends, instead of looking into a bigger picture.
There are reasons for the binary options trader to zoom out. The price range and times from a zoomed-out view gives a clearer perspective of trends and other underlying factors that affect asset price. With this in mind, it is advised to zoom as far as the last point where candles still look like candles instead of bars in a bar chart. Alternatively, a binary options trader could also switch to a higher time frame, although this will entail an entirely different stratagem for the trader.
Example of a 30-minute Expiry Time
Below is an excerpt of a EUR/USD price chart.
The blue lines represent 30-minute expiries. The whole excerpt therefore represents 5 hours of trading. 5 hours could be a decent amount of time to look into. However, it is not a great view for longer trading times such as end-of-day trades. This chart therefore is good for the 15 minute expiry or the 30 minute expiry.
If you enter somewhere in the region of the black dot, you would know how much time left before expiry (30 minutes). In the region of our example, it can be seen that there is a downtrend for the specific 30-minute interval, and the binary options trader can act accordingly. As we can see, this chart is ranging. But the question is, how much is the price ranging relative to the day’s action? Zooming out once can answer our question.
The price range of our 30-minute intervals relative to the previous ranges shows us that the previous view is not representative of trends for longer trading times. Zooming out again shows us a bigger picture, where we can see now that our previous price ranges is relatively steady compare to longer expiry times. Our 30-minute changes are relatively small compared to the big downtrends seen on the left.
This teaches binary options traders that they should not trade like horses with blinders. Knowing the general trends of the asset you are trading gives you the edge to make more informed predictions, which will lead to more successful trades, greater profit, and less risks.
Let us provide you with more useful insights like these in our succeeding articles. Stay tuned. In the meantime, why don’t you check out our list of recommended brokers, and see which ones you are most comfortable with to start trading.
How to Expiry Times Work in Binary Options
What Are Expiry Times in Binary Options Trading
Expiry times in online trading are the time limits until which the prediction made by the trader will have to come true in order for the trader to win the purchased binary options contract. Expiry times are basically the deadline of an options contract.
If the prediction made by a trader will not come true by the time of the expiry, the trader will lose the investment. If the prediction will come true after the time of the expiry, the trader will still lose his or her investment. Only what happens at the moment of the expiry matters.
Binary options expiration times are displayed on a countdown clock format related to every option. Here, players will be able to watch the time remaining until the options contract expires. Once the contract expires, the trader is not able to perform any more actions related to the expired contract.
How are expiry times established?
Most binary options brokers offer fixed expiry times that were previously established. However, some other brokers will allow traders to choose the expiry times that fit their trading style and trading strategies the most. There are basically two types of expiries.
Short expiries – Short binary options expiration times are those expiry rate that range only in a few minutes. The most common range for these expiries is 1 minute to 5 minutes.
Medium expiries – Contracts that expire between 5 minutes to 1 or 2 hours are contracts with medium expiration times. These contracts may some times pay put better than the ones with shorter expiries.
Long expiries – Some brokers offer online trading contracts with expiration rates of 2 hours to even 24 hours. These are the contracts with the long expiries in the financial trading business. These are also the ones that can be predicted the easiest.
Most optimal expiry times
The most optimal expiry time depends on multiple factors such as traders’ expectations, desired payout rate risk factor and more. Below you’ll find a description about the most advantageous expiry times in online trading.
Binary options with short expiry times are a bit harder to predict than contracts with longer expiration times. This is because it’s much harder to predict the movement of certain assets within a time frame of just a few minutes.
However, these are also the best paying contracts and also the ones that are in our opinion the most exciting. Having to wait a full day for the expiration of a contract is not that exciting to be honest, however, if the contract expires in a few minutes then you’ll enjoy trading much more.
Contracts with medium expiry times are a bit easier to predict than the ones with shorter expiry dates. However, these contracts usually pay out worse than the ones with shorter expiries and in our opinion are less exciting as well.
Contracts with longer expiries can be predicted easier because it’s much easier to predict the movement of an asset during a longer time frame. These contracts are safer indeed but they are also a bit boring to be honest and offer lower payout rates than other options.
Most optimal expiry times for various assets
Something that perhaps most traders are unaware of is that it does matter what expiry times you choose while using different assets. This is one of the few small things that considerably enhance the winning odds of those traders who are aware of them.
In case of commodities and indices, traders are advised to choose short expiry times. This is because commodities and indices are known to be those assets that fluctuate less. As such, making accurate predictions in the short term is very possible.
This will allow traders to purchase more contracts in a shorter time frame and as such, make more money than the usual. In case of forex options it’s recommended to choose medium to long expiries. This is because the exchange rate of currencies usually experiences very small changes very frequently and abruptly. However predicting the overall change in the exchange rate of a currency pair over a longer time frame is actually quite easy.
In case of stocks you traders should choose medium to long expiries. Subtitle changes in the movement of pretty much all stocks are being experienced at almost at a constant basis. However, the movement of most stocks can be predicted with a very great accuracy over a longer time frame such as a few hours.
Binary Options Brokers with the Most Flexible Expiry Times
When it comes to binary options expiration dates, traders should choose those brokers that have the most flexible expiries. If you’ve read the paragraphs below, then by now you’ll know that the correct usage of expiration times is a very important factor in developing a winning online trading strategy.
If only a very limited selection of online trading expiration rates are offered, then traders won’t be able to use the strategies and tips described above. Some fraudulent brokers intentionally don’t offer a flexible selection of expiries in order to prevent traders from winning.
However, all serious brokers offer multiple binary options expiries in order to enable traders to develop their strategies. Only register at these kinds of brokers. Binary options trading isn’t the same as gambling in the sense that in binary trading you can actually increase the winning odds into your favor. However, this can only be achieved at a legitimate broker.