Every binary option is based on an underlying (an equity stock, a currency exchange rate, an index, a commodity…). All these underlyings are listed on market exchanges that are only open during market trading hours. For instance, binary options based on company stocks are dependent on the price of these stocks that are listed and trades on stock exchanges all over the world: New York Stock Exchange, Nasdaq Stock Exchange, Euronext, Tokyo Stock Exchange… Binary option quotations follow that of their underlying assets, you should then know the trading hours of the underlying you want to trade. Nevertheless, more and more brokers are proposing binary option trading outside trading hours (night, weekend…), we recommend you to avoid trading options outside trading hours for the following reasons:
- Prices are less transparent – binary option brokers will use floor trading, Over-The-Counter trading or prop-trading to hedge their position, you will then have less visibility on the underlying price (these real-time data are expensive to get)
- Liquidity of the market is extremly low outside trading hours (almost no volume) and you will face adverse asset price movements
Binary option trading hours
Trading hours for binary options on stocks and indices
The biggest binary option broker for options on company stocks (AnyOption) is proposing up to 76 different stocks as underlying assets. Most of these stocks are from companies listed in the United States (New York Stock Exchange and Nasdaq) and Europe (London stock Exchange and Euronext). Please find below the official trading hours for these markets that correspond to binary option trading hours on these underlyings.
- American market – New York Stock Exchange and Nasdaq : 2 :30pm to 9 :00 pm (please that there is also a pre-opening trading session from 1 :00pm to 2 :30 during which the liquidity is sufficient to trade binary options)
- European market – Euronext and LSE : 8 :00am to 4 :30pm
- Australian market : 1 :00am to 9 :00am
Binary options on company stocks such as Facebook, Apple or Nike are thus tradable from 2 :30pm to 9 :00 pm while binary options on comany stocks such as Barclays, Vodafone or Britsh Airlines are tradable from 8 :00am to 4 :30pm. The same rules apply for binary options on indices. If you want to invest on US stock indices (Dow Jones, S&P500, Nasdaq…) you should do so from 2 :30pm to 9 :00 pm and if you want to speculate on European stock indices (FTSE100, DAX, CAC40, EUROSTOXX50…) you should do so from 8 :00am to 4 :30pm.
Trading Hours for binary options on forex (currency exchange rates)
The forex market is opened 24h/24 from monday to friday and is closed during the weekend. You can then trade binary options on forex (GBPUSD, EURUSD…) at any time of day during the business week. This is the biggest advantage of binary options on forex and the reason for their popularity among retail traders (they are able to trade these options outside their working hours).
Tradind Hours for binary options on commodities
Commodities trade physically or via future contracts in different market exchanges around the world (Chicago Board of Trade, ICE in London…) and trading hours may vary a lot among different commodities (binary options on Oil, Wheat, Gold, Silver…). Most brokers are making commodity binary option trading available from 8 :00am to 4 :30pm London Time.