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Short or long expiration

When one uses binary options to trade various assets online, one can see that in accordance with the different brokers, the expiration periods have variable durations. Certain options have short time periods (the majority in fact), whereas others (fewer), are for longer time periods. Of course, according to the expiration date of the option chosen, the trading method to be applied is different. To enable you to improve your investments by taking these differences into account, here you will find some explanations and some advice to follow.

 

How to trade a short expiration?

Of course, the large majority of the binary options that you see on the trading platforms have very short durations. The majority of them are indeed active for only a few minutes but they can also last for up to one hour. Beyond this limit, we generally refer to them as having a long expiration.

 

It is also fairly logical that the shorter the expiration date is, so a higher profit can be made. The profits can often reach 85% on this type of option. One of the other advantages of the short expiration period is that they make it possible to multiply the investments over a given period of time so increasing profitability.

 

However, it is recommended to be careful when trading over very short durations since most of the time, it is extremely difficult to forecast a trend over such a short term.  To increase your chances of success, you should therefore apply a specific trading method.

  • The real time charts: The analysis of the real time charts is extremely important since these are the charts that will enable you to determine the short term trends. Once a strong trend has been noted, you must also of course take into account the support and resistance levels which can reverse or on the contrary accelerate a trend in progress. Generally, only the constant trends lasting more than 30 minutes are interesting for the binary options.
  • The economic calendar: You no doubt already know that the economic calendar indicates the various influential daily announcements related to the economic, political or financial situation. Generally, these publications are very interesting for the subscription of binary options as they normally generate very strong movements of the asset price concerned by the announcement.

 

How to trade a long expiration?

Although rarer than the short expiration options, the binary options with a long expiration have many advantages as they allow you to trade over a longer period and therefore to better anticipate the trends. These options can have variable durations ranging between 24 hours to several days, occasionally even a few weeks.

 

However, the determination of long term trends also requires a certain method and some training.

 

The recommended method to use when trading long expiration options is similar to the more traditional trading strategies as above all you will need to complete technical analysis using different charts. Of course, here we are not taking into account all the micro movements as only the general trend counts.

 

To carry out this technical analysis, you should therefore study the historical data of the asset price concerned and locate similar situations to that of the current position that happened in the past. Once you have noted any similar events, you should use the information provided to forecast the coming movements over the next few hours, or days.

 

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