Trading Binary Options on Weekend

The stock exchanges in Europe and the USA are closed on weekends. Even though it sounds reasonable to take a break after hectic work for five days, there are people who wish to earn a credible extra income during weekends. However, weekend ultra short-term investment opportunities were practically nil until a decade before. Even Forex brokers do not allow trading in the OTC markets during weekends. All this changed with the advent of binary options. Low cost internet facility, advanced trading platforms, and availability of servers able to process tens of thousands of trades in a fraction of a second has opened a plethora of opportunities to trade on weekends. However, the immediate doubt that comes to the mind of a novice trader is how far those claims are real? This article makes an attempt to study the possibilities of trading binary options on Saturday and Sunday.

Weekend Options Offered for Trading

On the basis of expiry, all the contracts offered for trading on weekends can be categorized into two types.

Contracts that expire the same day

Most of the binary brokers offer option contracts that have a short-term expiry period (from 30 seconds to 1 hour). The short-term contracts are usually offered under the section of high/low contracts and can be traded over the weekends. A wide range of assets, including currencies, and indices, are offered for weekend trading.

Cryptocurrencies

As of today, there are only two cryptocurrencies that are offered for weekend trading via binary options. They are Bitcoin and Litecoin. The binary broker Finpari offers Bitcoin trading, while ExpertOption offers both Bitcoin and Litecoin trading.

Index futures

In the Middle East, several well-known stock exchanges remain open during the weekends. Most of the popular binary brokers offer contracts based on the indices of those exchanges for trading. The list includes Tel Aviv 25 Index (TA 25, Israel), DFM General Index (DFMGI, Dubai), Tadawul Index (TASI, Saudi Arabia), and Kuwait Stock Exchange Index (KWSEIDX). Barring Tel Aviv index, the binary broker Boss Capital and TradeRush offers trading in all other Middle Eastern indices listed herewith. However, Opteck and WYNN Finance offer Tel Aviv 25 index among other weekend-traded indices for trading.

Currency pairs

The most common currency pairs offered by binary brokers for weekend trading are AUD/USD, GBP/USD, USD/JPY, EUR/JPY, USD/CAD, and USD/CHF. TropicalTrade, WYNN Finance, and Porter Finance offer weekend trading in major currency pairs.

Notably, spot Forex brokers do not permit weekend trading in currency pairs. This is mainly due to the lack of liquidity as major financial institutions remain closed during weekends. Until 2014, most of the binary brokers were offering weekend trading only in Bitcoin and indices of Middle Eastern stock exchanges. As competition intensified, brokers started offering currency pair binary options for trading on weekends. The quotes are usually derived from dark pools of major institutions. These dark pools are open for trading even on weekends. For example, Panda Trading Technologies (Panda TS headquartered in Israel) is an established provider of quotes (Forex and gold) to binary brokers on a 24×7 basis. The company gets quotes from two dark pools based in Asia.

Contracts that close in the coming week

During weekends, binary brokers also offer contracts that have an expiry period of between 24 hours and many days. Three kinds of contracts are usually offered.

One-touch option contracts

These contracts have either a target price above or below the traded price of the asset in the market. As long as the price violates the target level, the trader will be credited the option’s return value. One-touch option contracts have an expiry period ranging from one day to many days. Anyoption, Porter Finance, and Opteck offer weekend one-touch option trading.

Ladder option contracts

They are similar to one-touch option contracts but with multiple target levels. The return increases as the price violates each of the higher levels. They may have an expiry period ranging from one to many days. Finpari, CherryTrade, and TR Binary Options offer ladder option contracts that can be bought during weekends.

High/low contracts

As told earlier in this article, normally high/low contracts expire in 24 hours. Two of the well-known brokers offering high/low contracts during the weekend are 24option and TopOption.

In addition to the assets mentioned in the earlier paragraph, some of the brokers (24option, Redwood Options for example) offer trading in binary contracts based to Nikkei 225 futures, Dow Jones 30 futures, FTSE 100 futures, and gold. The contracts related to these assets can be bought during weekends. However, the contract will expire only during regular trading days.

Returns on Weekend Trading Options

For the high/low contracts having an expiry period in the range of 30 seconds to 10 minutes, returns offered by binary brokers range between 65% and 78%. On the other hand, for high/low contracts with an expiry period of 24 hours, returns of up to 81% can be found. A successful one-touch option trade would result in a profit of between 110% and 250%, depending on the target. Finally, ladder options carry a reward of up to 600%. There are exceptions to these rules as returns are decided purely by brokers without external intervention or clearance from any kind of governing body.

Expertise Required to Trade on Weekends

There is no need to have any kind of special expertise to trade on weekends. Having said that, we also wish to caution that a binary trader should take into consideration the economic news releases that are scheduled to be announced later that week in cases when chosen contract does not expire the same day.

Weekend trading is a novel concept, which is quickly gaining popularity among part-time traders. However, before venturing into weekend trading, a trader should develop a profitable trading strategy in order to avoid the loss of capital.