What are long-term binary options?
As explained above, long-term binary options contracts are options that have expiration times of at least one full day up to several weeks or even months.
Traditionally, binary options expiration times ranged from 30 seconds to a maximum of one or two hours. For the past few years, these were the only expiration times available at pretty much every binary options broker.
There were two main reasons why brokers began to introduce long-term binary options at around 2014. First, every broker pretty much offered the same services and therefore some decided to offer long-term options in order to differentiate themselves from others.
Second, binary options managed around 2014 to attract mainstream attention and the review and critique of real investors and old-school Forex traders. These people have pointed out that short-term options offer a hard time for newbies to make money, as these options are very hard to predict.
These expert traders (rightfully) claimed that binary options could only become a real form of investing and trading if brokers would stop restricting the maximum expiration times of options.
It was pointed out that real investing is a long-term process, meaning that traders should be given the opportunity to trade long-term binary options if binary options are to be regarded a proper form of trading and not just a funny game of chance and luck.
How do long-term binary options strategies work?
There is a very specific reason why these kind of options are much easier to predict that short-term options. It’s because the longer an expiration time is, the less volatile the markets are overall and the better your judgment can be in making a prediction.
If you take longer times frames, you can also account for major events that are expected to happen during that time frame that might influence the movement of an asset. You cannot do this with short time frames.
Imagine the following:
You know that Apple will launch a new iPhone in 2 weeks. Based on this information how do you think the stock prices of Apple will move right after the iPhone launch? Will they decline or will they increase? – Obviously, they will increase most of the time in such a situation. This is what happens most of the time after a launch.
And that’s it. Using a long-term binary options strategy you just made money in binary options. The reason why you made money was because you accounted for an expected major event that resulted in your asset’s price increasing.
This strategy is impossible to implement using short-term options only. It is not possible to use a major news event to predict the movement of an asset during just a few seconds or minutes.
So, in other words, long-term binary options strategies involve accounting in for major news events that are expected to influence the value of an asset. I personally claim that this is the easiest way to make money in binary options.
Long-term binary strategy vs. short-term strategy
As I have explained above it is not possible to account for the effect of news events when it comes to short-term options (30 seconds, 5 minutes etc.); in these cases the only strategy you can use is that of technical analysis.
Technical analysis is an advanced form of strategy that involves you having to read and interpret various charts and use different indicators. This is very difficult for most people because reading charts and such is a bit complicated if you don’t already have a solid fundamental of financial trading.
On the other hand, when it comes to long-term binary strategies all you need to know is when a major event (such as new product launch) is taking place and then make the appropriate investment.
Real and to-the-point examples of long-term options strategies
Below you will find actual examples of the application of this strategy. You can do exactly what’s described in these examples and make money in binary options.
Apple is expected to launch a new iPhone in September 15 2016. You will wait around 2 weeks before this event and will buy a binary options contract that will expire on September 16th and predict that the value of Apple will be higher at that point that it is now.
And that’s it; you just won in binary options. Sure, this is not 100% safe but historically speaking Apple’s stocks usually increase after a new product launch.
Now, such an Apple event usually only happens 2 times per year. Surely, you need much more than 2 winning opportunities to make real money in binary options. But the thing is you can use this with any company such as: Microsoft, Google, Amazon (their Kindle products), Samsung, Sony, HP, etc.
You can literally find out within 10 minutes of Google search when these companies have their annual events and product launches.
Microsoft is expected to give its annual revenue report on August 10 2016. Two weeks before the event you will do a quick Google search and check for industry predictions whether Microsoft made more money during the previous year or quarter.
If everyone expects the company to have made more money, you buy a long-term binary option predicting that Microsoft’s stock prices will be go up on August 11th. If everyone seems to agree that the company made less money or that it stagnated, then you will buy a contract that predicts that Microsoft’s value will decrease by August 11th.
The best thing about this strategy is that you can do this on much more occasions than just with the one on example 1.). There are hundreds of companies out there that might not even be as famous as Apple and Microsoft and might not even offer any products (they do services). You just need to Google their revenue report release dates and then Google what experts predict and then buy the appropriate binary options long-term contract.
And these are just two ways of making money in binary options with long-term strategies.
As you can see by now, this is perhaps the easiest way to make money. This is also the reason why brokers introduced this concept so late. The majority of traders don’t even know these things and stick trading with short-term options. Now that you know all these, make sure to use them and you will likley make money in binary options.
Brokers where you can use long-term binary options
As said above, not all brokers have this form of options. For this reason below I will list some of the brokers that do and are known to be legit.
Finpari (Accepts USA) – One of the few legit brokers that have long-term options and accepts USA registrations. Finpari offers options with expiration times up to a full year.
CTOption (Accepts USA) – This broker does not have a specific category of “Long-term options” but allows you to select long expiration times up to 5-6 months on the expiry selection drop-down menu at every option available.
24Option (Non-USA) – A fully EU regulated broker that offers long-term options of up to one year. If you are outside of the USA then this is the top broker you should choose.
StockPair (Non-USA) – Another legit and fully regulated broker recommended for non-USA traders. You can choose expiration times of up to 6 months.
And to close this article, I highly recommend you use this strategy because it does really work and in my experience is perhaps the easiest that exists. You don’t have to spend time analyzing charts and looking at indicators etc. You just need to look out for major news events and based on those make the correct predictions.