Latest Developments in Binary Options Trading

To fuel growth, the binary brokers continue to churn out advanced derivative products for trading. Additionally, the binary brokers also offer never before heard facilities.

A trader should be well aware of these new products and facilities to improve the chances of success in binary options trading.

1. Double up:

   It is a facility which allows a trader to double the investment in open trades. Using this feature, a trader can increase the quantum of profit, when the price moves as per his forecast. The facility can be used before the contract expires and based on certain terms and conditions. For example, let us consider that a trader has bought a put option in crude oil. Let the expiry period of the contract is 1 hour. Fifteen minutes later, having seen the price move in his favor, the trader uses the facility to double his investment in the trade. If the trade ends as expected, the trader would realize a much higher profit because of the double up feature.

Option Alpha

2. Early exit:

   The early exit feature enables a trader to exit from the trade before the expiry period. As it can be understood, the facility would be quite useful when the trader believes that the price is suddenly undergoing a trend reversal. Alternatively, the facility can be used to cut down losses. Usually, the facility is made available within three minutes from the time of entering the trade and until five minutes before the expiry period.

3. Roll over:

   It is similar to the carry forward feature in the Forex markets. When a trader believes that he would win the trade if the expiry time is little bit later, then the rollover feature can be utilized. Once enabled, an extension to the expiry time period is given by the binary broker. However, the returns from the trade will be less than what was promised earlier.

4. Insurance:

   It is one of the latest facilities offered by a select list of binary brokers. Using this facility, a trader can insure the loss arising from a trade. In a case where a trade is lost, the trader can claim back a portion of the investment made in the trade. Naturally, the returns from the successful trades would be less.

5. Re-strike:

   It is a very useful facility which allows a binary trader to change the strike price after entering into a trade. The facility can be used when a trader believes that he will lose the trade by a difference of few notches in the price of the asset.

6. Auto trade:

   The facility allows a trader to automatically enter into a chain of trades with the profit from one trade being invested into another. The facility will cease placing orders when all the predetermined trades end in profit or when one of the trades ends in a loss.

7. Knock-in:

   It is similar to a stop loss buy or sell feature that is used by a stock market trader to trigger an entry when the price reaches a particular level. The feature can be used to enter into a binary options trade, when the price of the underlying asset violates a particular level in the spot market.

8. Social or copy trading:

   The feature allows a trader to automatically replicate the buy or sell trades executed in another binary option trader’s account. Even the percentage of funds to be used for copying a selected trader can be set with this facility.

9. Option builder:

   It is a facility offered usually to large investors who may need customized contracts that cater to specific needs (for example, to trade large volumes). Other investors may face certain restrictions in using this facility.