Traditionally, trading binary options tends to be a short term affair. Historically the expiry times that were available on binary options ranged from 30 seconds to several hours at the most. However since the beginning of , brokers began offering binary options with longer expiry times. Perhaps brokers thought that since everyone else was offering short term binaries, it would be a good idea to differentiate themselves by offering their traders the ability to trade on a longer term.
Experienced traders want options, they want to be able to hedge their short- term trades with longer term and so add a level of depth to their trading portfolios. Adding long term binaries may help brokers gain further acceptance from the mainstream investment community.
Financial investing is essentially a medium term or long term activity. In order for an investor to be able to predict how the market will move, the time frame must be sufficiently long enough for the investor to make his analysis with.
Hence binary options brokers, responding to the needs of their traders, started offering binaries with expiry times as long as a year in some cases. Comparatively, long term binary options are easier to trade with than short term binaries.
As such, it is easier to make a judgement call about how the market will move. Another benefit of trading with longer time frames is the fact that you can factor in major upcoming events which can affect the price of an asset. With short term binaries, this is not possible.
Let use Apple as an example. Historically, each time Apple launched a new model of their iPhone, the price of their stock goes up. So imagine a scenario where you know Apple is going to launch a new phone in one week time. So if you factor in this piece of information into your trade, you know that Apple stock price will rise in one week time. Hence, if you timed your trade to expire after the product launch, you will most likely close in the money.
With short term binaries, the strategy that we just mentioned above is impossible to implement since you cannot predict the effect of a major event into a trade that last for half a minute to a few hours.
By now you can see how much easier it is to make money with long term binaries. This is also the reason why binary brokers only introduced long term binaries after binary options have been around for 6 years. Most binary traders are not aware of this fact and hence they stuck to trading short term binaries.
So if you use this strategy properly, you can be sure that you will make some serious money. BinaryOptionStrategy does not accept any liability for loss or damage as a result of reliance on the information contained within this website; this includes educational material, price quotes, signals data, trade ideas, and analysis.
Please be aware of the risks associated with trading the financial markets; never invest more money than you can risk losing. The risks involved in trading binary options are high and may not be suitable for all investors Binary Option Strategy doesn't retain responsibility for any trading losses you might face as a result of using the data hosted on this site.
The data and quotes contained in this website are not provided by exchanges but rather by market makers. So prices may be different from exchange prices and may not be accurate to real time trading prices.
They are supplied as a guide to trading rather than for trading purposes. Investors can lose all their capital Review Visit.More...