In spite of fixed returns or ‘call’ or ‘put’ options many traders experience the loss while trading. Seeing this deficient of binary options trading, many platforms have provided flexibility and facility that help traders to lock the trade and quite it before expiry. No doubt, it is a great way to invest money in the market as it helps traders to be at safer side even if they are trading in a volatile market.
When binary options are used to trade in the trading markets such as stock exchange, foreign exchange, index market, etc the trade can be existed in two ways. Both the ways are correct and equally profitable, which have potential of being more lucrative.
Exit while Exercising Options Trading
While exercising the binary option, a trader can make way to exit from the trade; however, he should make a point that he exists at the time when he has chances of earning high profit. Exercising the option is one of the effective ways to exit an underlying trade.
When the option is being exercised, the buying and selling is executed. The binary option will be exchanged at the appropriate time in their underlying assets. For instance, exercising a call or put stock option would allow buying an underlying stock at the strike price, which means entering a long lasting stock trade.
If the trader has entered the long stock trade, then with the help of some strategies and tricks, a trader can easily get out of unprofitable trading. Let us see how.
- Fist he should entre the trade by getting call option.
- Second, he should wait for the price of the underlying asset to shoot up.
- Third, he should exercise the call options by getting an underlying stock at the strike price.
- Fourth, now he should sell the asset at the current market price, maintaining the different in between strike price and current market price.
Selling Binary Options Trade
Selling binary options is another method of exiting from an underlying asset trade. When binary options are sold, a trader automatically exits from the trade; however, he should keep in mind that he makes enough profit from the trading before exiting. A trader can easily exit from a long stock option trade, let us look how he enters the trade, and exit from it.
- A trader enters the trade by purchasing call options.
- The trade waits for the price of an underlying asset to shoot up.
- Then, he exits the trade by selling the call option, by locking his profit and maintaining the difference between the buying and selling price of the asset.
When a trade exercise binary options to make exit from the trade, he either sells or purchases the underlying asset and earns the commission on his trade. When the options trading are sold to exit from the trade, the trader does not earn any additional commission.