What does expiration time mean? Options expiration - what is it? date of fulfillment of obligations under futures contracts, completion of the transaction and final settlements between the parties for futures or options, also called expiration in medicine

Expiration - the expiration date of a transaction or the completion of a binary contract. In other words, this is the moment when a trader sees the final result of his entry into the market. The deposit has grown by a couple of hundred dollars, or vice versa, it's time to pledge the family silver.

As a rule, brokerage services offer clients an independent choice of the expiration date, but within a certain range of values. For example, y, a trader can choose options for 5, 10, 30 or 60 minutes.

Date or time

Studying the trading terminals of binary platforms, you will come across two options for choosing the duration of the transaction:

or indicate the exact date of closing the contract, for example: 13.05 or 21.40;
or mark the time interval from the moment of opening until the moment of expiration, for example: 5 minutes, 10 minutes, 1 hour, etc.

What's better? In fact, there is no difference. Matter of habit. We only note that by choosing the time, you save yourself from additional calculations of the number of minutes or hours until the end of the contract. On the other hand, if trading “on the news,” then in this case, it is more convenient to control and combine the date of the event and your own trading tactics.

Best expiration dates

Here the choice is dictated by the skills of the player, his experience and the strategy that he adheres to. It is incorrect to highlight specific terms that give more profit.

If you look at the offers of different brokers, you will find trading platforms with expiration intervals from 30 seconds to several months. As you can see, the range is huge. Having worked with binary options for some time, you yourself will determine the optimal trading mode for yourself.

Let us give you some advice on the most appropriate time frame.

Expiration up to 10 minutes. The so-called turbo options. Short-term work or scalping. The method is popular with beginners due to the seeming simplicity and the speed with which you can earn. However, in practice, this method is very risky due to the huge amount of trading noise, which is abundant in a tight market. It is very difficult to calculate anything in such a chaos of price fluctuations.
Expiration within one hour. This technique is used by both beginners and experienced traders. The interval allows you to make safer and smarter trades than pipsing. The number of contracts with such work is small, however, the total amount of transactions for the day session will fully satisfy the needs of any trader. Naturally, we are talking about successful deals.
Daytime expiration. This approach to trading is the choice of professionals. The strategy allows you to plan your work as carefully as possible, taking into account a large amount of information. Its disadvantage is the long wait for the result, but it is leveled by the opportunity to get more income, due, again, to the volume of valid, useful data for analysis.

Advice. When starting to trade binary options, stick to medium-term strategies. This is the most convenient and safest method. You will have enough time for a preliminary assessment of the market situation and at the same time, your hands are free for several transactions a day.

Non-standard methods of expiration

Speaking about the timing in binary options trading, we should mention such techniques as extended and early expiration.

Extension of the deal - an increase in the period of the contract's activity. This method is beneficial if you clearly see the profitability of an open trade and understand that closing it at a previously agreed time will prevent you from making more money.

Another example. On the contrary, you realized that expiration in the selected period will lead to losses, but you assume that soon the value of the asset will turn in the direction you need. By extending the trade, you increase the chances of a successful outcome.

Early closure- an expiration option in which you stop working before the set time. The reasons are the same as for an extension: you foresee either a large profit or a loss.

Note that, firstly, not all brokers allow the practice of such trading techniques, and secondly, even if you are allowed to change the expiration dates, the commission charged by binary platforms, in this case, can reach 40 –50% of the original rate.

What to consider when choosing expiration

The factors influencing the expiration time are determined by each trader independently. We propose to consider the main ones.

Assets

Any product has its own specifics. For example, indices and commodities are characterized by low volatility, while currencies and business securities, on the contrary, are highly volatile. Therefore, in the first case, it is logical to use short deals, in the second - medium-term.

Strategy

Connection working strategy with the choice of the binary option interval is obvious. If you mostly scalp, it is foolish to choose the expiration time of the contract in excess of even 30 minutes, and vice versa, daily or weekly investments contradict the minute expiration.

Analysis

Which methods you use when predicting the price of an asset also determines the time of the trade. Fundamental analysis implies large amounts of information and long-term investments, technical analysis - work with short intervals.

An experience

Actually - important point... We have already said that short-term trading is deceiving in its simplicity. The compressed period of time in which it is necessary to make an informed decision requires skills. If you are a beginner, start with more predictable trades.

Trading platform

When choosing a broker, pay attention to the acceptable parameters of transactions before replenishing the deposit with real money. They are all different for everyone. Binomo limits expiration to an hour, and, for example, Finmax allows you to keep trades open for 6 months.

Target

Everything is simple here. You need quick money - set the term shorter, if you want a larger amount and predictable trade - longer.

Expiration date is an important, but not the most difficult tool in a trader's arsenal. binary options... Several trades on a demo account and you will understand what suits you, which intervals are safer, which ones are more profitable. The main thing is to approach trading consciously, and not to play roulette with a broker.

There are no trifles in binary options trading. There are many factors to consider for successful trading. Of course, market analysis and strategy are important. But it is also worthwhile to correctly determine the expiration period, since the final result often depends on this.

If you have just started learning the basics of binary options, and you still do not know what expiration is, do not skip the next paragraph.

In fact, there is nothing terrible and complicated in this term. Expiration is the termination of a contract earlier than the specified term. Upon its expiration, or during (depending on the type of option), the trader makes a profit if the agreed conditions are met. Or loses investment if the forecast is wrong.

What expirations can I trade in binary options?

Before determining which expiration time is right for you, you should figure out what options are generally available in terms of transaction time.

Turbo options

Options are quite popular among beginners, as they allow you to make a profit every 60 seconds. However, experienced traders try to bypass them for the reason that trading at such an expiration is practically unpredictable and the risks increase several times. But it is possible to trade turbo options with constant profit, but only a few do it. Such speculators are called scalpers, and their trading strategy is "Scalping", which may require a lot of knowledge and experience to master.

Short-term options

These options surpass all other types in popularity. Trading from 5 minutes to 2-3 hours is common among traders of all levels. There are several reasons for this:

This expiration period allows you to conduct a sufficient number of transactions per day;
Deals from 5 minutes can be analyzed. Moreover, the higher the timeframe, the greater the likelihood of a correct forecast;
The ability to use indicators. Of course, it is also possible to impose indicators for minute deals, however, they are unlikely to show reliable information.

Long-term options

Options until the end of the week or month are used less often in binary options, since it takes a long time to wait for a possible profit. However, in some situations, such trading will be fully justified. But more on that later.

All transactions involve risks. But, if you carefully analyze the asset before entering into a transaction, you can be almost sure of a positive outcome.

Nevertheless, each option lends itself to analysis in different ways. For example, the easiest to predict an option with an expiration at the end of the day as exchanges are more predictable before closing. But at the beginning of the day, it is better to protect yourself from buying options, since at this moment there is practically no information about the state of the market.

Hourly and daily options are the most stable after long-term trades. However, the latter are not popular, since many traders, especially beginners, find it psychologically difficult to tune in to the analysis of such a long expiration.

Short term options are most effective. After all, profit can be accrued every few minutes. Combining this with skillful analysis and actionable strategy, you can get a pretty decent percentage of successful trades.

However, short-term deals also have one major drawback, which not everyone can cope with. The ability to buy options so often pushes the trader to enter into erratic trades. As a result, he gives in to excitement, and binary options become a platform not for trading, but for a game that resembles roulette.

Selecting expiration by type of analysis

You can also choose the optimal expiration time by the type of analysis.

If trading is carried out using candlestick combinations (on a trend change or reversal, etc.), then usually 2-3 candles will be the optimal expiration. That is, if the timeframe of each is 5 minutes, the transaction time should be 10-15 minutes;
If your main strategy is based on drawing support and resistance lines on the chart, while trading on a rebound from them, the expiration time should be 3-4 candles;
But when trading on a line breakout, you should make deals with an expiration of up to 10 candles;
Trading with a trend is one of the most popular methods for a trader. Usually, in such cases, you should buy an option with an expiration of up to 30 candles. Although it is not necessary to always adhere to this rule. Some deals can be profitable even in a much shorter time frame;
When trading on news, a wide variety of expirations can be used. For example, if the news from the annual report of a bank was taken as a basis, the expiration period can be up to a month. But when you release any top news, for example, the publication of the volume industrial production a certain country, a deal can be opened even for a few minutes.

Expiration selection for a beginner

Trading with expiration up to 5 minutes is an increased risk. Accordingly, no matter how much beginners want to increase their capital in a matter of minutes, this is not recommended. Otherwise, instead of a rapid increase in income, you may be faced with an even faster drain.

By far, options with weekly or even monthly expiration are the most stable. But a beginner is unlikely to be able to conduct an independent analysis for such a period.

Based on this, it becomes obvious that the best option for a beginner speculator there will be expiration from 15 minutes to several hours.

When you gain experience in trading, such questions will not arise. The expiration time will become a technical question, which you will already answer intuitively.

Many traders (and I at one time too) do not understand at all how to calculate the expiration time in trading and what to pay their attention to. As a result, trading is reduced to guessing, but not to a systematic approach. In this article I will try to fill this gap in your information field.

To begin with, it is worth mentioning that the price moves in waves - along the support and resistance levels. And it doesn't matter at all whether these are local levels, global or even dynamic - the main thing is that these are the zones of greatest interest to traders.

It should be said right away that if your strategy already contains expiration time, then this method will not work for you! This method is applicable only to trading candlestick patterns, trend continuation and reversal patterns, and Price Action patterns - to trading methods based on bare technical analysis.

The very calculation of the expiration time is based on the calculation of Bones (Bounce - bounce). In trading, this term denotes the time (number of candles) during which the price covered the distance between two support and resistance levels.

As an example, let's take a sideways movement - a price movement limited by a resistance zone at the top and a support zone at the bottom.

We have a certain number of candles for which the price passed from the resistance level to the support level. Accordingly, we need to understand how to set the expiration time.

To do this, you need to know the following rules:

Bones is the number of candles for which the price passed from one level to another.
Expiration time is half Bones, but not less than 3 candles!

Thus, after the first downward movement (10 candles), we get an expiration time of 5 candles for a pullback from the support zone. The expiration time is calculated in the same way and after the price moves up - the full movement of 6 candles (Bones), expiration time = half Bones, i.e. 3 candles for a rebound from the resistance zone.

There are times when the price moves in a sideways channel or in a trend for a long time. In such situations, you can more accurately calculate the expiration time. To do this, you need to calculate the average Bones value.

For example, taking the same lateral movement, we get the following Bones up:

The sum of these Bones divided by their number will be the average. Accordingly, if you divide this average value by 2, you will get a more reliable expiration time. In this case, the formula will look like this: (6 + 4 + 6 + 15) / 4 = 8 (rounded up), respectively, and the expiration time will be equal to 4 candles (8/2).

The expiration time for a pullback is calculated in the same way, after Bones down:

In this case, the average Bones will be 6, and the expiration time will be 3 candles.

It should be understood that the downward movement of the price takes much less time than the upward movement of the price.

This method is applicable to trend trading as well, so it can be used everywhere.

You can see more details in this video:

Expiration- the moment the option is exercised. All trading instruments available to speculators can be conventionally divided into groups. If we look at the list of binary options available for purchase, we will notice that there are contracts that should be executed in a few minutes, others have hours left before completion, but there are also those that will expire only in a few days.

Most binary options brokerage companies offer various contracts. For example, below you can see that EUR / USD can be purchased with a wide variety of expiration times.

Some companies generally offer contracts of 30 seconds, 60 seconds, and so on. That is, we can purchase a binary option at any time, which should be exercised already, for example, in 1 minute. As a rule, such trading instruments have a lower percentage return than other options with a large period before expiration... 60 seconds binary options are very popular among scalpers.

In the rating of binary options brokers, you can choose a company with optimal conditions for your trading. We recommend that you pay attention to and

The less time remains until the option is exercised, the more difficult it is, as a rule, to predict the outcome of an event. Nevertheless, scalpers guess the moments in the market when, from their point of view, the situation with a trading instrument is as clear as possible. At such moments, transactions are concluded to purchase short-term binary options, as a rule, 60 seconds.

Let's look at the example of one of the brokerage companies, how the change in the option exercise time affects the profit percentages on transactions:

60 seconds - 67%
5 minutes - 83%
90 minutes - 83%
1 day - 70%
2 weeks - 65%

Perhaps it makes sense to start trading in the binary options market by studying tariffs, in order to immediately start training with that expiration time that brings the most income. It can be seen that in the above example, the most profitable trades are obtained within 5 minutes and a couple of hours.

In different companies, rates, as well as percentage priorities may be different, so the above example should not be regarded as an unambiguous recommendation.

Each speculator can choose independently with what time expiration of options work. Modern trading conditions allow you to trade binary options, the execution time of which ranges from 1 minute to several weeks. In some cases, it is possible to trade instruments whose execution time is generally 30 seconds.

Each time period of the contract has its own trading systems... Thanks to the systematization of trading, speculators have a real opportunity to make money on the market not in a random way, but in a systemic way, which is potentially more stable.

The term "expiration" is applicable to binary options, where the main indicator is the time during which the transaction continues and completes. Expiration is the moment when the option expires and the player takes profit or loss. The duration of the transaction is determined by the trader based on trading strategy, trading period, trading conditions (news, economic data), etc.

Depending on the chosen broker (IQ option,) a trader can either independently choose the option execution time (up to 30 seconds), or accept the broker's conditions, which sets the moment of completion of the transaction based on technical capabilities. Also, some brokers allow you to increase the expiration time for already open options.

Advice: when choosing a broker for trading, give preference to companies that allow you to increase the time for open options. This will reduce the risks if an open trade is at a loss at the time of completion.

Types of expiration dates

Binary options brokers offer a wide range of expiration dates, from turbo options, where a trade lasts from 60 seconds to 5 minutes, to longer options of a month or more. Right choice the moment of completion of the transaction plays an important role in binary options trading.

Newbies, as a rule, choose the timing of the option at random and unconsciously, without thinking about the current market situation and working out their own shopping style... Novice traders most often use intraday trading, which is characterized by the opening of a large number of transactions with a short expiration time of options - from 60 seconds to 1-2 hours.

The profitability of trades in intraday trading is much lower than in long-term options, therefore, it is associated with increased risks. This type of trading is suitable for those traders who are confident in their knowledge and are not afraid to take risks. For beginners wishing to short term get quick results and high profitability their trades, it is not recommended to practice intraday trading.

For traders who have doubts about choosing the correct expiration time for a trade, it is recommended to use b O longer term for options. With this approach, the number of transactions is reduced, which gives the trader the opportunity to more carefully assess the situation in the market.

Longer term options are less risky. When opening deals, you can rely not only on technical analysis, but also on economic news and other events in the world that may have an impact on quotes.

The disadvantage of long-term trades is a lower percentage of reward compared to turbo options. For example, when trading options for 5 minutes, the trader will receive 85% of the invested amount, while when opening a deal for 24 hours or more, only 70%.

How to choose the right expiration?

When meeting with financial markets the trader faces many questions - what is it, etc. But the main question is how to choose the options expiration time to achieve the greatest profitability.

When using a ready-made trading strategy, there is no problem in choosing the option expiration time, it is indicated in the description of the strategy itself and has been checked by other traders.

In the case of creating your own strategy, you must adhere to the following rules:

when choosing the duration of transactions, be guided by the working time frame on which the quotes are analyzed;
choose the moment of completion of the transaction, equal to x3 or more candles of the working time frame;
take into account the selected asset for trading, for indices and commodities - from 5 minutes to 1 hour, for currency pairs - from 1 hour to a month, for stocks and other instruments stock market- from a week to a year.

Most traders choose an expiration of 3-5 candles on the working time frame. That is, if a trader analyzes a 5-minute chart, the transaction time will be 15-25 minutes. The duration of the option can vary depending on when the volatility of the currency pairs increases.

It is worth noting that strategies originally developed for long-term transactions behave quite differently on small time frames. Analysis tools (indicators, advisors, etc.) designed for a longer period will have different indicators in medium and short-term trading. The combination of the described nuances should lead the trader to choose the optimal expiration time of transactions, which will correspond to his trading strategy and trading style.