While doing a iron butterfly. I traded a forex pair say usd/eur… I did a low risk in ITM trade( 80/20) I did a put. The fornex pair moved little. MY question is why it remained in the negative profit column much of the Trade??? I was hoping to scalp the trade early!!
Why in trading fornex binary options price remain negative
sharpie
#2
An Iron Butterfly is buying the lower and selling the upper. Deep in the money trades are more of an expiration type trade.There has to be some time decay. The more ITM, the more time has to continue for the price to move. To do a scalp, it would be better to do an ATM. say a 50/.50 trade. With those, the price moves the fastest.
FRIGA69
#3
Thank you Sharpie. One more question. Does holding a fornex binary until expiration erase any profits due to fees and risk of last 3 minutes of trade.
When you first enter a trade it costs $1 per contract to open. If you exit anytime before expiration it will cost you another $1 per contract. If you hold until expiration and the trade is a success (since binaries are all or nothing) it will cost you a $1 per contract)
However if the trade loses at expiration, you will just have to pay the $1 per contract that you used to open it with.
You dontt want to hold a trade until expiration though… To much can happen in those 2 minutes… and not being able to exit the trade, just to maybe make a couple extra dollars really isnt worth it