If you are trading binary forex options with Nadex, you may be wondering how to exit a trade. Exiting a trade is a critical aspect of trading, as it determines your profit or loss. Nadex offers several ways to exit your trades, and in this article, we will explain how to exit a Nadex binary forex trade.
Before we dive into the different ways to exit a Nadex binary forex trade, let’s quickly review what binary options are. A binary option is a financial product that allows traders to speculate on the price movements of a particular asset. In the case of Nadex, traders can trade binary options on forex pairs, commodities, indices, and cryptocurrencies. Binary options have a fixed payout and a fixed expiry time, which means traders know their potential profit or loss before entering the trade.
Now, let’s look at the different ways to exit a Nadex binary forex trade.
1. Wait until expiry
The simplest way to exit a Nadex binary forex trade is to wait until expiry. Nadex’s binary options have a fixed expiry time, which means the option will either expire in the money or out of the money. If the option expires in the money, the trader will receive the predetermined payout, and if it expires out of the money, the trader will lose their initial investment.
If you decide to wait until expiry to exit your trade, you don’t need to do anything. Nadex will automatically settle the trade and credit your account with the payout or debit your account with the loss.
2. Sell the option before expiry
Nadex also allows traders to sell their binary options before expiry. This feature is known as early closure, and it allows traders to exit a trade and lock in profits or limit losses before the option expires.
To sell your option before expiry, you need to go to the “Positions” tab on the Nadex platform and find the option you want to sell. Next, click on the “Sell” button next to the option, and a sell order ticket will open. The sell order ticket will show you the current market price of the option and the potential payout or loss. If you are happy with the price, click on the “Sell” button to close the trade.
It’s important to note that the price you receive when selling the option before expiry may be different from the current market price. This is because the price of the option is determined by the market, and it can fluctuate based on various factors such as market volatility, time to expiry, and the underlying asset’s price movements.
3. Let the option expire worthless
If you have a binary option that is out of the money and is unlikely to expire in the money, you may decide to let the option expire worthless. This means you won’t receive a payout, but you also won’t lose any more money.
To let the option expire worthless, you don’t need to do anything. Nadex will automatically settle the trade and credit your account with $0.
4. Roll over the option
Nadex also offers the option to roll over your binary option. Rolling over means extending the expiry time of the option to a later date. This feature is useful if you believe that the market will move in your favor, but the current expiry time is too short.
To roll over your option, you need to go to the “Positions” tab on the Nadex platform and find the option you want to roll over. Next, click on the “Roll Over” button next to the option, and a roll over order ticket will open. The roll over order ticket will show you the new expiry time and the cost of rolling over the option. If you are happy with the new expiry time and the cost, click on the “Roll Over” button to extend the option’s expiry time.
It’s important to note that rolling over an option will incur additional costs, and the price of the option may fluctuate between the original expiry time and the new expiry time.
In conclusion, exiting a Nadex binary forex trade is a critical aspect of trading. Nadex offers several ways to exit your trades, including waiting until expiry, selling the option before expiry, letting the option expire worthless, and rolling over the option. Each method has its advantages and disadvantages, and it’s up to the trader to decide which method is best for their trading strategy.
