Learning the ins and outs of binary options trading is one of the best methods to strengthen your trading results. Every aspect connects to another and traders should fully understand the significance of these factors as well. One of the critical factors for traders to understand is the expiration rates. For binary options, expiry rate is an influential factor that figures out whether your prediction is successful or not. GTOptions explains the significance of these expiry rates and how do these rates affect your decision as a trader.
Just what are expiry rates?
Expiry rate at its core, is the key to determine the end result of your trade. Basically, the rates influence the payout of your chosen option. It influences your decision as to whether your asset’s price movement will rise (the Call Option) or drop (the Put Option). It serves as a basis on how an asset will move based on the expiry rate and expiry time as shown on your purchased option.
Expiry rates are based on calculations. Each asset class has its own formula to calculate these rates. But before we proceed to this topic, let’s take a walkthrough on the terms used at the trading platform of GT Options.
Bid Price refers to the latest market price that is used for selling an asset before the option’s expiry time.
Ask Price on the other hand, is the latest market price that is used for buying an asset before the option’s expiry time.
Last Quoted Index Price is the last quote price for an index before the option’s expiry time.
For assets like currencies, stocks and commodities, the formula for computing the expiry rate is (Bid+Ask)/2. For indices, calculations are based on the last quoted index price that appears in the data provider at the expiry time.
Having an overall comprehension on GTOptions expiry rates will help you make a stable decision when placing a bid. By investing your time in doing some research on your asset and the markets, you will be equipped with the right knowledge to assess your GTOptions trading decisions and therefore meet your financial objectives when you trade.