Many binary options traders do not realize that it is possible to lock in some amount of profit even before an open contract expires. This can be done within any platform that offers you the ability to sell your open contracts. Although the total return rate will never be received when a contract is sold prior to expiry, selling an in the money position is the only way to guarantee that money will be earned from a trade. Why sell when you could potentially earn up to an 85% return on your investment?
It should first be made clear that whenever an open position is deep in the money selling is not likely to be the best option. However, during times when the asset price starts to move against you, exiting the trade with some amount of profit is likely to be a wise decision. For example, if you entered into a trade to profit from a price trend but that trend reverses, selling could prevent a total loss of your investment amount.
Another strategy for selling would be to go into a contract with a plan to sell already in place. This method eliminates any need to make tough decisions while the expiry time ticks away. Here, you would sell the position once the option moves into a position of profit. This will close the trade and lock in some profit. Should the option not be moving into a position of profit, sell anyway. The purchase price would be less than your investment amount, but in selling you’d avoid a total loss.
Do pay specific attention to the available features associated with each trade. It is possible that the trade cancellation button could be near the sell button. Trade cancellation is something that many binary options brokers do allow, but there are limits. Abuse of the cancellation can be considered abuse of the platform and could even cause you to lose your account and any profit amount that exceeds your initial deposit.
The ability to cancel a trade is provided for the sole purpose of allowing traders to exit a trade if they’ve made a mistake such as selecting the wrong trade type, investment amount, asset, or other trade component. It was not designed as a means of exiting a trade that is not going your way. Use this feature as it was intended and there should be no problems, but do check with your broker to find out what the exact limit is on trade cancellations.
Although the individual profits derived from selling open positions are not going to be nearly as impressive as those derived from trades that finish in the money, with a higher trade volume there exists the potential to generate substantial profits. Each time you sell an in the money position, you come out of the trade a winner. When trading binary options, losses are going to occur. This is unavoidable. However, by selling certain positions while they remain open, loss numbers can be decreased substantially.