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Day Trading in Binary Options

Binary Options Trading

You’ve heard about trading with binary options in your favorite asset categories. However, it may be the first time that you could be hearing about day trading in binary options. Is there a big difference? Yes. The concept of day trading revolves on a very simple idea: traders need to open a position and close it within the same day. In a nutshell, it pertains to opening and closing a Call or Put position in a binary options contract within the same day.
A binary contract involves expiry times and dates. Note that there are trading platforms whose offers for expiry times are variable. All conventional binary options contracts, however, have a fixed expiry. Once a trade commences and is active, traders are unable to close their positions manually; they can choose an expiry time that will cause the trade to close within the same trading day.

Fewer Risks

Over the last several years, day trading has become popular among investors because of the affordability of technology that allows it. Real-time prices can now be accessed over the Internet such as availability of free intra-day graphs, 10-minute bar charts, and the appeal of being emotionally and financially ready upon completion of a trade and just before another one commences.

The general assumption for day trading is that it is less risky when compared to traditional trading where contracts are bound to end for several days or weeks. Some can even go longer for a month. Intraday trading also eliminates overnight risks that can potentially shift prices against an open position. For a day trader, by definition, it exists only during the day.

Choosing the Right Broker

It is very important for traders to choose the right trading platforms that offer trades to expire on the same day. It will determine the kind of expiry date/time in a binary options day trading contract. Brokers that use the SpotOption white-label platform have the classic Call/Put options as well as the OptionBuilder trade type that allow for intraday expiries. It is also very easy for investors set the 60 second and High Yield Touch options to expire on intraday trades.

Brokers using the white-label Tech Financials are offered a more limited intraday expiry options. They can take advantage of the High/Low option or the High Yield Boundary option to fit their day trading schedule.
For brokers that allow for options to be customized, intraday expiry times can be set using their High/Low or Rise/Fall options. However, some brokers may limit the use of these options to certain asset classes. Generally, the following assets can be used for binary options day trading: Commodities (limited), Currencies, Indices and Stocks.

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