One of the features of trading options is the expiry time. This is the moment when the market says check and your option is examined. We will tell you about the best expiry time for binary options and how it differs for digital options.
IQ Option is one of the leading online options brokers. They have a wide range of assets which include forex, commodities, stocks, indices, cryptocurrencies, options and digital options.
Options and digital options have a predetermined trade expiry. That is, once you enter the position, you expect it to last anywhere from one minute to one month. This short guide will teach you how to trade based on the trade expiry time provided by IQ Option.
Trade expiry for options
Best expiry time for binary options
One of the features that make IQ Option stand out among options brokers is the length options positions can last. While most brokers will limit options positions to 1 day, IQ Option allows you to hold positions for up to 1 month. This comes in handy for traders who want to hold long positions.
The minimum time you can hold an option position is 1 minute. Trades lasting between 1 minute and 5 minutes usually have a higher return than those lasting 10 minutes to 1 month. So looking in terms of payout rate, the best expiry time for binary options should be between 1 minute and 5 minutes.
Trade expiry for digital options
IQ Option digital options positions can last 1 minute, 5 minutes or 15 minutes. When trading digital options, you'll need to predict not only the direction of the asset's price but also how far prices will move from the strike price.
Chart features you need to be familiar with when trading options and digital options
Time feature
This is found on the right-hand side of your trading interface. This indicates the trade expiry. The default is set at 1 minute for both options and digital options. You can increase the time to expiry by clicking on this feature. The possible expiry will then be displayed allowing you to choose the expiry you prefer.
Trade open countdown
This is a white dotted vertical line that appears on the price chart. This line indicates the amount of time you have left to open a position. Once the timer reaches zero, it the countdown starts at 60 seconds. As long as the timer hasn't reached zero, you can open as many positions on the specific asset you're trading.
Trade expiry
This is a red vertical line that also appears on your price chart. It also includes a countdown clock which indicates the number of minutes or seconds remaining before the options trade expires. Once the price touches this line, the position is automatically closed.
Candle/bar time interval
When trading using bar or candle charts, the time interval represents how long it takes for a candle to open and close. The candle and bar time intervals on IQ Option range from 5 seconds to 1 month.
Tips for trading options and binary options
Which time frame is best for binary options?
In fact, the time frame of a chart depends largely on the time horizon of your trades, the trading style you prefer and finally how much time you can devote to trading per day. In our recommendations, I will focus on day trading because it is the most popular.
I recommend using Japanese candle charts when trading. They are easier to read and analyze compared to line and bar charts.
Use 5-minute interval candles. These give you a better picture of how the prices are moving compared to candles lasting 5 seconds to 1 minute which fluctuate frequently.
Your trades should last 5 minutes or more.
What is the best strategy in binary option?
A binary options trading strategy is a set of rules that decide when and which option you open. In fact, the search for the best strategy is pointless. It's like someone telling you to choose the best car. Which one will you choose? A Porshe 911 because it's an iconic sports car? Or maybe a Land Rover Defender, which is an indestructible off-roader. It's the same with trading strategies. They are supposed to work, but they must be tailored to the needs, conditions and abilities of the trader.
The best strategy for options trading is certainly a simple strategy. If possible, use simply to read indicators such as the SMA, RSI or Bollinger bands for technical analysis. These indicators make it easier to identify trends and their reversals allowing you to make more accurate predictions. And remember that the best expiry time for binary options should be matched to the strategy used and directly derived from it.
Good luck!