The Best Times to Trade Binary Options
Binary options trading involves trading assets and creating a profit determined by the price direction. Some of these assets are traded on a 24-hour basis like currencies, commodities and stock indices.
Usually stocks are not traded on a 24-hour basis but you have some brokers that offer Options contracts for longer time periods. The market and the trading hours that go with this market, determine the times at which a stock listed in that market is traded. This means that for different stocks there are on a global scale different trading hours, the binary options trading platform will reflect that by offering these stocks only during these hours.
When there is volatility there are opportunities for trading, this has always been the rule and especially for binary options, where there is in general a small window doe the trades, this is true.. When there is a lot of trader activity for specific stocks, it generates the liquidity and volatility needed for the underlying asset to reach its target before the option contract expires.
Even though assets like currencies and commodities are supposed to be around the clock markets, there are still certain times of the day when this level of volatility is reached. In general this is when we have an overlap of the trading zones occurs and multiple markets trade at the same time.
Not all assets have the same trading hours this is why we will separate the various classes of assets as entities, taking into account their own particular trading hours.
- Index futures
Timing for Commodities
At the following times the Commodity markets are the most active:
- Crude oil (NYMEX.CL) – 9am EST to 2.30pm EST
- Natural gas – 9.30am EST to 5.15pm EST
- Corn – 9.30am EST to 1.15pm EST
- Gold – 8.20am EST to 5.15pm EST
- Silver – 8.25am EST to 5.15pm EST
Timing for Stocks
Stocks are usually traded for a maximum of 6 to 8 hours a day. Stocks of most major companies outside the US are traded on the US stock markets as American Depository Receipts (ADR). Therefor the US markets are used as the default for checking the trading hours for stocks. US stock markets usually trade from 9.30am EST to 4pm EST.
Still since stocks are available globally, there are other markets in Europe that are just as significant, for example the FTSE (7am GMT to 3.30om GMT) and the Xetra Dax (8am GMT to 4.30pm GMT) in Germany. If you are trading stocks in the binary options, look at the times at which the stock markets in which they are listed are in operation.
Timing for Index Futures
Stock indices are CFD instruments that measure the movement of the relevant exchanges, As such, the NASDAQ100, S&P500 and DJ30, are open according to the US markets (from 9.30 am EST to 4.30pm )EST, and the DAX30 will conform to that of the Xetra Dax’s trading hours.
In order to become profitable you need to understand when to trade and have these hours memorized or written down.
Timing for Currencies
The forex market is most active when there is an overlap of the London/Asian and London/New York time zones. The diagram below provides a perfect illustration of this.
The local currencies of the active time zones will always have increased volatility over others since traders are trading those assets they are most familiar with and in general this is the currency of their time zone. For example, the Australian Dollar will be more active during the Asian/London time zone overlap than the London/New York time zone overlap.