Many binary options brokers now offer traders the opportunity to sell select open positions back to them. While some only offer to purchase positions that are currently out of the money, some will purchase in the money positions as well. The key to using this feature well is knowing exactly when to sell and this trading method will help you make that decision.
Whenever an in the money position is sold, it is sold for the purpose of locking in some profit. The purchase price offer should always be higher than the investment amount. The offer will vary, with a higher price being offered for positions that are deep in the money. Obviously, you’ll need to strongly consider selling such positions, as they stand a higher chance of providing you with a 100% payout. It is not uncommon for traders to sell a position and then see that it would have finished in the money.
Easier decision making comes when the asset price is volatile. Since these positions could go either way, you could choose to sell when the price moves into positive territory and exit the binary options trade with some profit. Some traders will even enter into trades having already planned to sell the position once it moves into the money. This is often referred to as scalping, and the practice is completely legal and not frowned upon within the binary options industry. If you’d like to lock in smaller profit amounts and build your account funds in that manner, then selling is the ideal feature for you.
Selling a position while it is out of the money will be a stop-loss action of sorts. Doing so will prevent you from losing your entire investment amount on a trade that is not going as you’d hoped. Again, you’ll notice the purchase price offer varying along with where the price is positioned. A higher offer will come when the position is not deep out of the money, with a lower offer being presented when the position is far from being profitable. Should a price trend that is opposite of your prediction be noted, selling is likely to be a wise move.
The sell feature is not made available along with every type of binary options trade. Typically, it is only made available on standard trade types such as basic Put/Call trades and Long Term trades. Don’t expect to see it offered with Sixty Second trades, as these run too quickly to allow for the feature to be executed. The feature may or may not be offered along with One Touch and Pairs trades. Check with your broker to see which trade types can be paired with the sell feature.
The most solid method is to make decisions about selling in advance of the trade going live. Consider establishing a set number of pips at which you would like to sell, setting a level for each side of the trade (both in and out of the money). By establishing these sell points in advance, you will experience less stress over deciding when to sell and will also eliminate a lot of the pesky emotions that typically cause binary options traders to make unwise decisions.
***Your capital may be at risk. This material is not investment advice.***
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