Some Good brokers offers traders the opportunity to sell select open contracts back to them, a fact that makes this market exit strategy one that can be used in the digital options arena. The sell feature is relatively new to the marketplace and it has been very well-received. Each broker may have their own specific rules in place for the use of this feature, but the way it works is that the broker will offer you a purchase price for your contract, which you can either accept or decline. What this strategy aims to do is to help you know how to make the most of this feature.
To begin with, you will have to understand why a trader would ever want to sell one or more of their contracts. In reality, the decision to sell is often made based on an effort not to lose too much money. The decision to sell can be extremely tough when you are not sure that your digital options trade is not going to end in the money. What it all comes down to is risk. If you suspect that your trade is going to deliver profit, then selling may not be the best idea. On the other hand, if you feel that there is any real chance of losing your entire investment amount, selling back to your broker could be an extremely wise move.
Each broker will set a specific time for delivering a purchase offer and then retracting it. In most cases, any purchase offer is going to be removed once the expiry time conclusion approaches. Unless you have entered into the trade knowing in advance that you want to sell, the best plan is to wait as long as you possibly can before making a decision. When you do this, you’ll be able to learn as much as possible about the existing price movement and can then make an educated decision regarding whether or not to sell.
The amount of money that is being offered to you by your digital options broker should be taken into consideration. The amount will vary not only by broker, but also by just how likely the trade is to finish either in or out of the money. If you are trading along with a trend and suspect that price reversal may kick in before the end of expiry, selling makes sense. If the price of your selected asset is very erratic, selling may still be your best option. Even if the purchase offer is low, the ability to recover some of your investment amount is a nice one to have.
The best case scenario is that once your trade begins to run, you will be able to clearly see the direction of price movement and can then make a decision. If the price is moving as predicted, you’re headed towards profit and likely in great shape. If not, you can hold out for the purchase offer and then exit the market via use of the sell feature. Most brokers do not offer refund rates and the sell feature in conjunction, but if given the choice between the two, try to determine which option is going to be more lucrative. Refunds rates have become more rare among binary options brokers as sell features are now so popular.
The market exit strategy is all about analysis and decisions. Keep in mind that with shorter expiry times, some fast decision making may be required. The best plan is to know in advance whether or not you would even consider selling. If so, then position yourself in front of your computer screen and be ready to watch the price action unfold. There is no need to panic if your asset price is not moving as predicted, but do be sure to make a sell decision before it expires.