When buying binary options, for example, options "above" or "below", the trader is important to determine whether there is an opportunity to buy an option as closely as possible by the end of the auction.

Acquiring binary options "above" or "below» («above» or «below»), the exercise price of which varies depending on the price of the underlying asset, the investor must be able to accurately predict the most favorable time of purchase.

The cost of most options "above" or "below" is defined for an hour or two hours before the close of business, when it becomes clear to the price of the underlying asset. For example, if the value of the S & P 500 is fixed at the level of 1100, the price of the options is "higher" or "lower" will also be 1100. In this case, the dealer will offer you the option to put on the increase or decrease in value of the underlying asset, relative to the level in 1100. As a rule, the profit can be considered stable at close to 80%, and the exercise price will range price of the underlying asset is not committed. Dealers binary options usually slightly change the level of payments, understating it below the level of 80%, as there is an additional risk of price changes in either direction, in attracting more investors.

Value of the option is usually fixed in 15 minutes prior to the actual expiration Trading binary options. This means that trading binary options on the closed, while dealers or traders are awaiting the outcome of market trading on the main asset. The procedure is arranged in this way to the dealer does not have to assess the value of a binary option immediately before the expiration of options trading. The period of time prior to the expiration of trading on binary options is considered the most risky. Since most minimal changes underlying asset price can lead to the fact that you either get or do not make a profit on the contract. For example, if the option is "higher" price range of 1100 the S & P 500 is trading at 1100 for 45 minutes before the deadline, the change in the price of 1 point will not have a significant impact on the price mark of the option. However, for three seconds before the expiry of trade, step into one item, called Pip, decides whether you can make a profit on the option, or permanently lose the deal.

When trading binary options with standard, it makes sense to acquire stock options in advance with long expiration. The longer the term of the option (30 days compared with a period of one day), the more valuable is this option. The potential value of the option increases if the trader can receive additional income option, having delta hedging or, resell it (or re outbid). Using binary options, the outcome of which depends on the execution time, we have to take into account the volatility of the mainstream market, which in this case is against the option buyer. Since buying binary options, even a slight fluctuation in the moan above or below the strike price leads to a certain result of the transaction, it is best to trade such options to minimize the amount of time remaining before the term of the option. Since most of the transactions in binary options such as "higher" or "lower" stops in 15 minutes prior to the expiration of the option, the smart buyers need time to buy or sell options as close to the 15 minute time fixing the market value. (It is also necessary to foresee the fact that no economic or fundamental report will not be published for the period of the option, the investor who wants to use).

Mark Densel
Author: Mark Densel
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