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Thread: Early closure

  1. #1
    Active Member Frontline's Avatar

    Early closure !!!

    Are there any research made which broker has the best early closure -feature? This is a very important option, but I have not seen much reviews about it. - Is there only a certain period you can close your position or can you do it anytime during the trade? What percentage or amount you can get when closing earlier etc.

    Some brokers offer a good payout for early closure and some offer nothing. Some inform before the trade is made if it can be closed before expiry - which is a very good feature - and some inform only after the trade is made that it cannot be sold before expiry.

    Have you seen any research or comparisons made on this very important feature?

  2. #2
    Master Member SeasaltMcFish's Avatar
    I don't see any good use of this option. You invested in a trade with a plan, so stick to it.

    One of the strong parts in trading BO is the 'fire and forget' principle. With early closure you lose that and may be better off with trading Forex.

    Problem is: you invested 100% in a trade, but get only a small part in return with EC. The odds that the trade runs your way again is mostly bigger than the tiny amount of money you receive with EC. Same thing when in profit: you opened a trade with a target, so believe in your setup. Closing early cost you money in the long term if your setups are right.

    The only time I use EC is when I made a mistake in opening a trade. When my setup says "Call", but I make a mistake and chose "Put", I may close the trade asap.

  3. #3
    Active Member Frontline's Avatar
    I am not that skillful that my plan always works, so I prefer to take a smaller loss. Sometimes I also see it better to secure a win, if the situation begins to seem unsecure.

  4. #4
    Legendry Member milos's Avatar
    If you want to secure your capital you'll use risk management policy. Use only 2% per trade. You mentioned to close trade before expiry. You can get only 15-20% payout per trade.

    As trader you have to learn to read the charts and use optimal time frame expiry. You invest 100% in trade and get paid 70-85% payout if it is recorded in the money.

  5. #5
    Active Member Frontline's Avatar
    Quote Originally Posted by milos View Post
    If you want to secure your capital you'll use risk management policy. Use only 2% per trade. You mentioned to close trade before expiry. You can get only 15-20% payout per trade.

    As trader you have to learn to read the charts and use optimal time frame expiry. You invest 100% in trade and get paid 70-85% payout if it is recorded in the money.
    Yes,Milos.I know all that. But do you really win all your trades? What do you do if you see your trade turn to negative? Does it never happen to you? I repeat: I prefer a smaller loss if my trade seems to loose.

    And what if you see a good trade opportunity - don't you think it pays if you invest 4% and close the trade before expiry in same profit you would get from a 2% trade at the expiry? I have found that a good solution when you can't be sure about the expiry. And when can you be?
    Last edited by Frontline; 11-15-2015 at 01:14 PM.

  6. #6
    Master Member SeasaltMcFish's Avatar
    You have to think a bit like a poker player: if the odds are right, you call, else not.

    Always look at the payout you'll receive when you close early. Mostly it's only a little money when in a losing trade and price far off, and still less then your original payout when price is still close. However: when price is still close, there is still a good chance you'll end up in the money. Closing early in that case is burning money. Even when far off the money, it can always turn around fast. You never know. If your payout because of early closure is only 10% of normal payout, you'll only have to be lucky to get a turn around 1 in 10 trades!

    Yes, your trade can still go wrong and the chance it does go wrong when in losing position is bigger than winning the trade, but the time you really win the trade after all, payout is so much better, it pays off the losing positions you closed early that would have been a winner in the end.

    On the other side: when in a winning trade, early closure cost you money too. Your profit will be less then when the trade ends ITM, but your investment is the same. Sometimes a trade will go wrong, costing you money too, but the times you don't close early and win the trade, covers those losses when trading a solid system and money management.

    It's all Math.
    Last edited by SeasaltMcFish; 11-15-2015 at 02:52 PM.

  7. #7
    Active Member Frontline's Avatar
    It's all Math." Yes it is. But actually I am asking have you noticed any differences in early closure payouts between brokers? One could think that this is one way of enticing customers in the fierce competition everybody can see in the binary option markets nowadays. I have not changed broker - found a good one - so I do not have much information about these early closure payouts. That's why I am asking

  8. #8
    Master Member SeasaltMcFish's Avatar
    I guess there are differences, but don't know. I'm using only one broker atm.

  9. #9
    Solid Member pak12345's Avatar
    I have seen this option to sell your assets before the trade expires. But as in the discussion above, i think it can help you save a few cents only if your analysis went wrong.

  10. #10
    Legendry Member Michael Hodges's Avatar
    I think that would be hard to track, differences in early closure payouts, because those prices are offered only after the option goes out of the money, you'd have to start two trades at exactly the same time, at the exact same strike, with exact same expiry. The key is to recognized when a trade has gone bad, have the balls to sell it when it has, and the guts to keep it if you think it will still close in the money. The bad thins is that with short term binary options when a trade goes bad it may be too late to recoup much of a loss when a trade does go bad.

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