An interesting thing to check regarding the choice of your binary options broker is the trading functionalities that are proposed on the related broker’s platform. Three of the most common trading tools provided by the best binary options brokers are the double up, the rollover, and the early closure. These functionalities can have different names amid different brokers but they kind of all work the same way. These tools allow you to improve your level of control and risk management over your trading positions while they are still open. When binary options brokers do not provide these tools, your trades are literally out of your hands until they expire. This is why you should only select brokers that propose at least these three functionalities.
Definition of the Early Closure trading tool
The Early closure trading functionality allows you to get out of a position before the trade expires in return for a partial discount on your initial return. The Early closure is the most useful trading tool provided by binary options brokers. Imagine you are in a winning trade, but you expect the underlying asset trend to reverse. You can use early closure to get out before the reversal and benefit from a certain albeit lower return. Same thing with a slightly losing trade that you think will deteriorate. The Early closure tool can enable you to get out with a slightly lower profit rather than end up with an almost certain loss of your invested amount. A partial profit is always better than a loss.
The Early closure tool is conditioned to multiple parameters. Some brokers might impede you from using it if your position is about to expire or if the asset price is to close from your strike. Most brokers may only let you use the early closure tool if your binary option is either far In-The-Money or far Out-Of-The-Money. So be sure to check the terms and conditions of your broker before using the Early Closure functionality blindly.
The Early closure is the most useful trading tool
According to us, the early closure is not only the tool that improves your risk management the most; it is also the only binary options trading tool that does not increase your risk exposure! The two other main tools (Rollover and Double up) all require an additional investment and thus add further risk to your open position. Early closure represents the most conservative strategy for managing your open trades when things are not going as you expect.
You must definitely resist the temptation to Rollover all your losing trades in the hope of catching up for your losses. As we explained it multiple times on the website, the most important skill of a successful trader is the discipline and you should always try to stick to your initial trading plan. Nevertheless, if strong catalysts or indicators that justify the extension of your initial maturity arise, then the Rollover can be used as an improved risk management tool.
Our brokers propose even further trading tools
All our recommended regulated binary options brokers are offering such functionality on their platform. The most intuitive one is OptionTime where you can « rollover » your position directly from the main trading window. 24option, TopOption and AnyOption are also proposing this functionality but you’ll need to do it through a secondary trading window. Don’t hesitate to have a look at our detailed review of OptionTime for further details and click on our below secure link to visit the broker website.