Trading Sessions and How They Affect Binary Options Trading
One great thing about trading binary options is that you have access to a wide range of assets. Some financial instruments are traded only during certain times of the day, while others are traded 24 hours a day. Markets do take weekends and holidays off, but for the most part, if you really want to trade at any given time, you can. Here are the market hours for the different types of assets you can trade with binary options:
In general, the US stock markets determine the trading hours for stocks. Stocks are one of those assets which are not usually traded 24 hours a day. The US stock markets tend to open for trading at 9:30 am EST and close for trading at 4 pm EST. Even a lot of foreign stocks are traded on the US stock exchange. There are some exchanges in the US like NYSE Arca which are open during different hours (4:00 am to 9:30 am EST and 4:00 pm to 8:00 pm EST). These markets are open Monday through Friday, and are closed on Saturdays and Sundays.
Some European stock markets are also highly relevant to binary options traders, though, like the FTSE, which opens at 7 am GMT and closes at 3:30 pm GMT. Another one to keep an eye on is the Xetra Dax, which opens at 8 am GMT and closes at 4:30 pm GMT.
Indices of stocks measure the movements of actual exchanges, which means that the market hours that govern stock exchanges like those listed above likewise govern index trading. Look up the hours of the stock exchange in question to find out when you can trade the associated index. Indices, like stocks, generally cannot be traded 24 hours a day.
Currency trading is a global activity, which means that Forex markets are open 24 hours a day as various sessions open and close, including the Sydney, Tokyo, London, and New York sessions. Here are the summer hours (remember to account for daylight savings time and standard time throughout the year):
- Sydney: 10:00 PM – 7:00 AM GMT
- Tokyo: 11:00 PM – 8:00 AM GMT
- London: 7:00 AM – 4:00 PM GMT
- New York: 12:00 PM – 9:00 PM GMT
As you can see, there is an overlap in the market hours. The busiest times of day are those when the sessions overlap. This is usually the time with the largest price movements. The European sessions is the most active of the lot, so many traders who deal in currencies like to schedule their trading hours for the European session or the overlaps. This can be inconvenient if you are on the wrong side of the planet, but you can use trade alerts to trade overnight. Also note that the currency markets do close over the weekends, usually from Friday afternoon until Sunday afternoon on most platforms.
Here are the most active hours for common futures:
- Crude Oil: 9:00 am – 2:30 pm EST
- Natural Gas: 9:30 am – 5:15 pm EST
- Corn: 9:30 – 1:15 pm EST
- Gold: 8:20 am to 5:15 pm EST
- Silver: 8:25 am to 5:15 pm EST
The best times to trade any of these financial instruments is when the markets are active and in full swing. What are the worst times? Avoid trading over weekends or entering into trades on Friday afternoons and waiting for the market to open again on Sunday or Monday. There is usually some chop coming out of a weekend, and it is an easy way to lose a trade. Also steer clear of holidays when markets are closed. You will also want to be aware of financial reports and other major events which can cause volatility in the markets. Some traders make money trading these events, while others do best to avoid them completely. Binary options trading has many benefits to offer traders, and the ability to deal in all these different assets makes it easy to schedule your trading!