Trading the Real Short Expiry Times
The short expiry time is all the rage with binary options traders today. For a while, one minute expiry times were the lowest that one could select. Today, a few brokers such as 24option, have dropped this down to 30 seconds – an amazingly fast time period for trades. Before deciding to partake in rapid trading, let’s take an inside look at the benefits and drawbacks of using such brief expiry periods.
The appeal of super-short expiry times is clearly the potential for fast profits. Additionally, many people now live busy lives and don’t have time to sit around and monitor each of their binary options trades while they are open. Some could simply not have the patience required to wait a long time to find out whether or not they’ve earned a profit or lost their investment amount. When trading well, traders can rack up large profits quickly. This is the largest draw for these types of trades.
The drawbacks of fast trading are few, but significant. Just as fast as profits can add up, so can losses. Binary options traders must know when to opt for other expiry times when trading isn’t going well. Under certain market conditions or with certain assets, a longer time period may be required in order for the asset price to move in the predicted manner. To put it simply, sometimes a single minute is not long enough to allow the asset price to perform the way you want it to.
Most binary options brokers allow traders to pair these expiry times with the basic Call/Put trades. There would be too much risk on the part of the broker if they allowed traders to pair them with boundary trades or other trade types which are dependent upon price stability. They could be offered with One Touch trades, but then the broker would be at an advantage. Call/Put trades are simply the most reasonable option for being paired up with super short expiry time periods.
The payout rates associated with these trades can be just as high as those associated with lengthier expiry times. Whether or not these trades qualify for any refund will be left up to the binary options broker. Some no longer provide refund rates on out of the money trades, and many that do link specific trade parameters to the ability to receive a partial refund of the investment amount. Check with your broker to see if any refund rates apply to your losing trades.
Since there are some very distinct benefits to using super-short expiry times, traders should not overlook them. However, each trader needs to really consider the best times for opting for brief expiries. When prices are trending in either direction, brief expiry times may be excellent, but during times when price action may take longer, a longer expiry period is going to be more appropriate. Everyone wants fast profits, but in reality, an hour expiry is going to allow for plenty of trade volume. Choose wisely so as to avoid any problems.