Most of the well-known binary option traders allow the traders to use one really great strategy that support the trading activities – its name is “rollover”. If you are an expert, then you should know that this feature is pretty useful, especially if it is used wisely and correctly. It is the best assistant in case you want to improve your profits. On the other hands, if you don’t know how to use it you might record huge losses. In this article we will show you how to use it in the right way.
The central concept of this strategy relies on loss limitation. Thanks to this features traders will have one more tool that can help them save the day in case the currently opened positions are about to fail. Although the whole rollover strategy might sound really simple you have to be careful while using it and you have to follow some rules before applying it. Such rules are:
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1. Execute rollover strategy only on live trade and only when you are recording loss.
2. Rollover can be implemented only once per trade.
3. If you want to utilize a rollover, you have to know that there is a commission that will be charged by brokers. Usually it is as high as 30% of the trade value.
4. Most of the brokers out there will let you execute rollover on positions that has less than 20 minutes before the expiration.
5. As soon as you select rollover, the time of expiration will be usually extended to the next available one.
You have to have some experience with binary options trading because operating with rollover requires skill because there is no 100% of success. However, rollover can save the day in case you are about to lose the positions which you have already opened.
Here is an example, to make everything simpler. Let’s say that you have executed a binary option of type CALL based on the currency pair GBP/USD. You have deposited 200$ and the strike price was 1.5100 while the time of expiration was set at 4.00PM GMT.
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The time is 3.30PM GMT and you see that your current position is generating loss because the current value is 1.5085. Thanks to your experience you have performed technical and fundamental analyzes that showed that in the last hour the pair has started rallying strongly.
In such circumstances it might not be a bad idea to extend the time of expiration by, let’s say, 2 hours. This can be easily achieved by using the rollover strategy. This might actually help you and bring your profits and eventually maximize them.
An Example Demonstrating When and How to Use Rollover
All those following fundamental events support the execution of CALL binary option based on the currency pair of EUR/USD. “The single currency has been extending its gains against the greenback and the result of this is a Spanish debt auction and release of heartening economic data of China. 14;00 GMT was chosen as time of expiration and a wager of 100$ was deposited.
Hit the submit button and the transaction starts. Now the trade is in real time.
There are 20 minutes left before the expiration and the position is not generating any profits. However, the fundamental analyze shows that in the last hour the currency pair started to surge above the opening price. This is a good moment in which you can use the rollover strategy. It will allow you to increase the time of expiration and eventually record profits. Don’t forget that there is usually a commission of 30$ for this service.
When the new expiration time finished the currency pair did managed to finish above the initial opening price and in that way you are now in the “in-the-money” status.
Thanks to the usage of rollover you have managed to generate good profit. A payout of 234$ was collected and all this thanks to this strategy. Of course, you should try to reduce your risk and decrease your expenses rather than just dream how to increase the profits – this is the most important thing you have to learn when it comes to online binary trading.