Expiration Rate Rules
Expiration Time, or "expiry times", is the date and time on which the binary option on a specific asset "expires". Asset value at this point is called expiration rate that is compared to the entry rate. The binary option’s expiration time is the time at which the system determines whether a prediction was correct or not. At this stage the two asset prices (the "bid" price, i.e. the price at the time of a prediction and the expiry price) of the selected stock, commodity or index are compared. The trader then either earns or loses money, depending on whether his prediction regarding the price change was correct. Binary options expiration times are much shorter than those of other trading instruments. The outcome of your prediction is known within a short period of time, from 30 minutes to several hours.
In a more simple term; Binary options are a simple and transparent way to trade the financial markets by simply predicting whether the value of any asset being either a Stock, Commodity, Indices or Currency will either rise or fall (Go up or Down) over a set period of time chosen by the trader. This period can last anywhere from 60 seconds up to One year (Chosen by trader). The expiration time (length of trade) is selected/chosen by trader as well as the amount allocated to the trade (Size of position) the profit is predetermined before trade is placed and is either 75-85% depending on volume in market. This allows the trader to know the upside and down side prior to placing any trade and allows the trader for the first time to structure a bespoke trading plan/capital management plan and tailor it in accordance to their financial goals, taking into account your appetite for risk as well as your objective profit taking.
The expiration rates are calculated based on the last known quotes provided by Quotes Providers:
Currencies: (Bid + Ask)/2
Commodities: Gold futures: (Last+Ask+Bid)/3
Oil futures: Last value
Indices: Last value
The following terms will be used to calculate the expiration rate
Bid: The last known price for selling an asset as provided by Quotes Providers, prior to the options expiration time.
Ask: The last known price for buying an asset as provided by Quotes/Liquidity Providers, prior to the options expiration time.
Last Quoted Price – The last known price that was actually paid for the asset, prior to the options expiration time. May be the same or different than the bid or the ask prices.
Dow Jones price index, or FTSE, is calculated from the last known price on the exchange.
Stock Citigroup, there is a price for Bid and price for Ask.
Also, there has been made a purchase of Citigroup shares fractions of seconds before expiration, for example, 19:59:59.
Thus, Directional Solutions Trader calculates the end price as the average price equal to (Bid + Ask + Last) / 3.
If the price of Citigroup at 19:59:59 was: Bid = 3.50, Ask = 3.52 and the last transaction (Last) 3.51.
Accordingly, the price at which the option closes will be (3.50 +3.52 +3.51) / 3 = 3.51
Directional Solutions offers to buy options at a price calculated by a special algorithm.
This price is not the market quotation. Price performance, stock exchange price of the asset at the time of the expiration of the option based on data received from the provider of stock exchange quotations.
It is this price that will determine the profitability of each option.
Information, including expiration rules for each separate asset, can be found in the "Assets" section.
|NASDAQ 100 Futures
|NASDAQ 100 Futures