Sell Feature: How and When To Sell Binary Options Positions

Sell Feature: How and When To Sell Binary Options Positions

Many binary options brokers now provide traders with the ability to see their open positions. Dependent upon the price of the asset at the time the sell is completed, a profit may be earned, or a loss minimized. Although some traders to choose to use this feature on a consistent basis, there will be times when selling is not the best decision. Profit and loss amounts can vary greatly when the sell feature is used, with much hinging on how and when it is put to use.

Within most platforms, a position can be sold regardless of whether the asset price is in the money or out. This presents two options – sell and secure a profit, or sell and receive a portion of the initial investment amount back. The option to sell will only be available for a limited amount of time, and this feature is rarely offered with short expiry times. If the option is not exercised within the allowed time frame, the trade will need to be allowed to run until completion.

When the option to sell is presented, execution will require only a few clicks of your mouse. The first selection will be the feature itself. A purchase price offer will then be presented. The final step will be to approve or deny this offer. If the offer is accepted, the trade instantly closes and the purchase price is credited to your trading account. Every binary options platform is a bit different, but these same basic steps will apply.

In no case will the purchase offer ever exceed the prospective return that is being offered if the contract were to finish in the money. It could, however, match that amount of be very close to it. The exact offer will be directly linked to just how far the asset price is away from the entry price. The largest offers will come when the price is currently positioned deep in the money, while smaller offers come when the risk of a loss is high. This means that deciding when to sell is going to be very important.

Analysis is required, even if the decision to sell is made in advance. There should be some validation for selecting one price direction over the other, and there should also be a reason for selling at a certain point. Few things will prove more frustrating than selling, only to find out that the trade would have finished in the money and provided the full profit amount. Without analysis, you’re simply taking action based upon a guess, and this is rarely a good thing.

If you haven’t yet selected a broker, and wish to be provided with the ability to close trades early, be sure that the broker does provide this feature. There should never be any cost associated with closing early, but this does not mean that the tool should be used with reckless abandon. It can be very advantageous to have the ability to exit out of a binary options trade prior to expiry, but planning and correct use are a must in order to avoid any problems.

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General Risk Warning: Trading Binary Options carries a high level of risk and can result in the loss of your investment. As such, Binary Options may not be appropriate for you. You should not invest money that you cannot afford to lose. Before deciding to trade, you should carefully consider your investment objectives, level of experience and risk tolerance. Under no circumstances shall we have any liability to any person or entity for (a) any loss or damage in whole or part caused by, resulting from, or relating to any transactions related to Binary Options or (b) any direct, indirect, special, consequential or incidental damages whatsoever.