Binary options have undoubtedly become one of the most traded instruments on the Internet. It has many advantages such as effective risk management, ease of use and controlled losses. But regardless of how appealing the prospect is there are some disadvantages that binary options face, one of them is that the trader has to wait for the trade to expire in order to know the outcome.
Many traders have found themselves in a situation where they opened a up/down trade which they found to be in the money immediately, sometimes within five minutes but they got their expiry dates wrong and a contrary movement made their underlying asset go out of the money later.
Fortunately a solution has emerged in the markets now for traders to avoid such types of situations. Many brokers have started offering customers the option of having variable odds in the market instead of the more fixed ones as before. This allows the trader to cut his losses before the expiry date is reached or take and leave with profits before the expiry date. This point can be better illustrated with an example.
Let us suppose that any arbitrary trader bought a binary option contract on any arbitrary asset, say EUR/USD currency pair. Let us say that the trader decided to bet on a bullish move and selected ‘fall’ on the up/down binary options trading strategy on a Friday just before the markets were about to shut down.
Maybe the trader took that decision by taking into consideration some debt issues hovering in Europe only to discover waking up the next Monday morning that everything has reversed because of an economic intervention by the European Union.
In order to save himself the trader gets to use the ‘take profit’ feature available by many brokers today where he or she can take whatever profits are available before the expiry is reached, thereby saving himself some considerable miss-fortune.
Usually this feature does not come free and a trader might have to pay the broker a certain fee for using it, but nevertheless it is still a useful feature that can help you minimize any loss. Traders must have an understanding that the assets might not always be available for lock-in profit making.
Certain restrictions are in place on how many times the trader can use the ‘lock-in’ feature in a day. Moreover, it is not applicable for some assets.
Regardless of any such restriction this feature is worth applauding as it has helped many traders time and again to avoid serious losses and sometimes even conserve profits before expiry is reached.
Therefor if you are a serious trader who is interested in maximizing your profits and avoiding losses due to unplanned, dominant forces of the market, then you must look for a suitable broker which offers this feature to tap the loss. This is what helps you make the most of binary options trading after all!