Early closure is a new feature in binary options trading that can be used to exit the market before it reaches expiry time. Using this feature, traders can reduce the loss they might have faced for wrongly predicting the value of options after they expire.
Also, closing a trade before time cuts down the profit that a trader makes for correctly predicting the value.
Traders who trade binary options apply this tool as a trading strategy to limit losses, which means it works like a risk management tool. It allows traders to take losses or profit if the trade is in the money before it expires.
Close now/early out feature in binary options trading in a nutshell
- Early closure in binary options allows traders to exit before expiry, managing losses.
- Effective for longer trades to secure profits or prevent losses when necessary.
- Advantages: Avoiding losses in the event of market shifts and early profit-taking.
- Disadvantages: Potential early profit cuts and accessibility restrictions.
When can you use the close now / early out feature?
It is applicable for traders who had traded for a long time, such as one-hour or thirty minutes trades. If the open position is profitable, they can use the close now feature to take the profits. It enables them to take profits before the open position expires if it was in the money long before expiration.
It is also applicable when the trade is losing or is moving against your predictions, and the trader decides to cut losses and exit early. It can save the trader from wiping out their balance and placing another trade instead of watching the losing trade.
Some traders have other reasons to exit a trade early, such as if they see a better trading opportunity. They close the open position and open another one. There are other reasons investors use this feature which works differently for traders.
Advantages and Disadvantages of the close now/ early out feature
- It saves the trader from losses if the market moves against the trade.
- Traders can take profits made early instead of waiting for the trade to complete.
- It is effective if the trader changes their mind after placing a trade.
- It can also cut the profits if the trader uses it prematurely.
- It is unavailable in some binary trading brokers.
- It is not accessible for traders with shorter expiry trades such as thirty seconds or one-minute trades.
- Some trading brokers have restrictions on how traders can access these features.
Conclusion – The early out feature is useful in some cases
The Closeout or Early Out feature is a crucial tool for traders when they want to trade Binary Options. Traders must understand the best time to utilize this feature to avoid making mistakes.
(Risk warning: Your capital can be at risk)
When is the best time to use a closeout feature?
The best time depends on the trader, if it feels okay to exit the trade you have to trust your knowledge.
Will I pay to use the closeout feature?
No, trading brokers offer it for free, although some have restrictions on how and when you can use them.
