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  • Early Closure


    Has anybody tried using Early Closure? This feature gives you the opportunity to exit out of an option earlier than its expiry time and get back a percentage of your capital. How does this differ from the buy back options that other brokers offer?

  • #2
    haven't tried this one yet but it sounds like it allows re-selling your options. how much percentage can you get back?

    Comment


    • #3
      Are you going to loose more on this Early closure or you are going to gain more on this? I have no idea about it also.

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      • #4


        Here are my early close trades at 24Option last December. They are copied directly from my trade history in the format as follows:

        Call/Put, Asset, Time entered (GMT-5), Trade amount, Price entered, Price exited, Time exited, Return, Pips, Total gain, % yield on investment

        I find several uses for the early close feature and it's one of the reasons that my choice for binary options broker is 24 Option, hands down. First, if price action indicates that your initial prediction on the direction of the market may in fact not hold, you can exit the trade either with a small profit or a minor loss rather than risk losing it all. Another way and, the one I'm aiming to take advantage of at some point is to use it in order to, "scalp" a binary options trade. There's a great example of this near the bottom of the list. EURUSD put option entered at 0949 for the 1000 expiry. Price entered was 1.28964 with an amount of $201.02 (bizarre amount, I know .. another story) At 0953 price had fallen nearly 4 pips to 1.28926 and I closed it for a return of $300.12. That's a gain of $99.10 on a 3.8 pip move. Not too bad. For my purposes, I'm working to the point where I can make a $1,000 trade a couple times a week, get a few pips and take $400 - $500. Less trades .. more discipline in choosing a trade and then taking a piece of the move. Well, that's the plan anyway.

        The thing about early close is the timing. The closer you are to expiry, the higher the return. So if you were to take this same trade for the same expiry time at say, 0930 instead of 0949 .. you wouldn't see a $99 return for a 4 pip move .. maybe more like $35. Couple other important things to consider: after entering your trade, you must wait about 2-3 minutes before being able to take early close. So you DON'T want to do this 7 minutes before expiry because you will be locked out 5 minutes prior. The main incentive for me to use early close is to limit risk by eliminating that last 5 minutes of, "wonder" when there's nothing you can do except watch and wait. We've all seen trades that nosedive or blast through the roof in the last minute or even seconds. This is a way to benefit from the move that you believe is happening without having to rideout those last 5 minutes, potentially biting off your fingernails. It takes the all or nothing aspect out of it because you will either lock in a little profit or recoup some of your initial investment. Which brings us to the next important consideration: amount of movement. Again, the return will adjust based on the time left to expiry but one thing is absolutely certain: you will NOT be in profit just because price has moved in your favor by 1/10th of a pip. With the EUR/USD pair, I've noted that you very often will need at least 2 pips before you're in the money. So that's something to consider .. you want to see a good 4 pips in order to take anything of any substance. Otherwise, you're just as well to trade a smaller amount and let it go to expiry. It's all about controling risk. If for example, the market is trending very well, you might want to wait for a pullback and then go with the trend, let it pick up a few pips and then close it out. Or, if you see strong evidence of a significant S/R area, you might want to take a bounce off that area and grab some pips there.

        Another aspect of the early close option that is also about controlling risk is being able to use it as a stop/loss. Looking at price action, determine where you believe the market is going and then find your entry point. But also, make a note of where to put a stop/loss so that if price goes against you, you can use early close to exit the trade so you're entire investment isn't lost. It should be pointed out too that, moves against your position tend to decrease your return faster as price moves. That same trade that I banked $99 on for 4 pips in my favor, might result in a loss of $170 of the initial $201 at the same time, 4 pips the other way.

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        • Ekron Freak
          Ekron Freak commented
          Editing a comment
          "Another aspect of the early close option that is also about controlling risk is being able to use it as a stop/loss. Looking at price action, determine where you believe the market is going and then find your entry point. But also, make a note of where to put a stop/loss so that if price goes against you, you can use early close to exit the trade so you're entire investment isn't lost. It should be pointed out too that, moves against your position tend to decrease your return faster as price moves. That same trade that I banked $99 on for 4 pips in my favor, might result in a loss of $170 of the initial $201 at the same time, 4 pips the other way."


          This is one example of early closure that seems to be favorable to my trading, so I keep track on this.

        • Ekron Freak
          Ekron Freak commented
          Editing a comment
          "Another aspect of the early close option that is also about controlling risk is being able to use it as a stop/loss. Looking at price action, determine where you believe the market is going and then find your entry point. But also, make a note of where to put a stop/loss so that if price goes against you, you can use early close to exit the trade so you're entire investment isn't lost. It should be pointed out too that, moves against your position tend to decrease your return faster as price moves. That same trade that I banked $99 on for 4 pips in my favor, might result in a loss of $170 of the initial $201 at the same time, 4 pips the other way."


          This is one example of early closure that seems to be favorable to my trading, so I keep track on this.

      • #5
        I'm afraid I am going to consult youtube about this Early options, Kuna.G things got really more complicated for me.

        Comment


        • SharkyTail
          SharkyTail commented
          Editing a comment
          Blue Mountain it is not as complicated as you think, it is like backing out of a trade if you think that the trade you are making isn't a good trade for you, so you try to pull back your investment before the expiry ticks, but in that case you won't be able to get back the whole amount you invested, instead a few percentage will be taken off your money.

        • CallMeTyler
          CallMeTyler commented
          Editing a comment
          I have to agree Kuna G have an awesome explanation but really really complex.!

        • ZerooneZettaChips
          ZerooneZettaChips commented
          Editing a comment
          SharkyTail is pretty smart, and what he said is what this Early closure means in lay mans term.

      • #6
        If you trade an asset that expires in 15 minutes and the trade isn’t going too well for you and you are certain that you will end up ‘out of the money’ by making use of the early closure option in binary options, binary options traders can further limit their losses. If you entered the trade with an investment of $100, binary options traders now don’t have to loose the entire initial investment.

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        • #7
          Kuna.G that was long but substantial explanation about early close trades. Thanks!

          Comment


          • #8
            tymo you are right about the very detailed explanation Kuna.G has provided, but I have to say it is very helpful so let's give him a big big thanks.

            Comment


            • #9
              Originally posted by CrazyBinary13
              Has anybody tried using Early Closure? This feature gives you the opportunity to exit out of an option earlier than its expiry time and get back a percentage of your capital. How does this differ from the buy back options that other brokers offer?

              The “early closure” or “option buy back” function works both ways. It can be used to take profits early. It can be used to cut losses.

              Comment


              • #10
                Is it always advisable to use the "Early Closure" orn the "Option buy back" option? Will it going to affect your standing as a trader, or does it really don't matter?

                Comment


                • EHudson
                  EHudson commented
                  Editing a comment
                  Giving your trade an "Early Closure" will not affect your standing as a trader, it will just give a conclusion that you are a very experimental trader, since you are always dealing with variables it is just ok to go and trade with different approach each and every time you want.

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