The basic binary options trade requires only a few steps for execution within a trading platform. This trade type requires a few decisions to be made, with the key decision being whether or not you feel that the price of a specific asset is going to move higher or lower in the near future. The […]
How To Utilize Supplemental Trade Features
There are a number of key supplemental features currently being made available to those who trade binary options. While these features are optional, there can be some serious advantages associated with using them when the time is right. The following information relates to three of the most popular extras being provided in many of the trading platforms being offered today.
We’ll start with the most popular of the three, which is the sell feature (known as Buy Me Out in SpotOption platforms). Prior to the creation of this tool, it was not possible to do anything other than allow a purchased position to run its course to the full expiry time. Today, traders can sell select positions back to their broker in exchange for either a profit or as a way to minimize a loss.
In order to sell for a profit, a position needs to be sold while the price of the traded asset is positioned in the money. The purchase price offer is directly related to price positioning. Larger offers are provided when the position seems headed for a profitable finish. On the flip side, an offer that is lower than the initial investment amount may come when the position appears to be headed towards a loss. It goes without saying that this ability has been a game-changer for many.
Another option made available to many traders is the ability to extend the expiry time for an open position. This feature should only be used to “buy” time for the desired type of price movement to materialize. For example, if you predicted that the price of a chosen asset is going to increase, but it is actually decreasing, extending the expiry time could provide sufficient time for the price action to shift in your favor. Note that knowing when to use the extend feature can be tricky, as there are never any guarantees that the outcome will be favorable.
Unlike the other two features that are being discussed her, trade extension (referred to as Rollover in SpotOption platforms) may come at a cost. Typically, binary options brokers as that traders risk an additional 30% of their initial investment amount in exchange of its use. If the trade finishes out of the money, that extra money is lost. However, if the position is a winning one, the profits earned are higher due to the increased amount of investment.
Last but not least are trade duplication and investment double tools. These can be used to duplicate an open trade and double the investment amount on an open trade, respectively. Trade duplication means copying an open position exactly, but take note that the new position will open at the current market price and not at the same price as the original position. Investment doubling (referred to as Double Up in SpotOption platforms) is simply the act of committing double the investment amount to an open trade.
Both duplication and doubling will involve an increase in the amount of money being risked, so the risk is clearly there. The investment sum should only be doubled when the asset price is firmly positioned in the money. The same can be said of duplication. As previously mentioned, there are no guarantees, but the overall level of risk will be much lower when the price of your chosen asset is clearly moving in the direction that you had predicted.
Supplemental trade features can certainly be helpful when they are used correctly. The biggest challenge is in knowing when to use them and when to leave them alone. With time and practice, it will become easier to know when and how to use each of these binary options tools to boost your profits.