Calculation of Binary Options expiration rates
Not to lie to the traders, binary option broker regulated based on data of the largest flow providers such as Reuters or Bloomberg. This is particularly true of, which is based on the official courses provided by Reuters or Bloomberg to determine the rate at expiration time T. Is known that the most trading platforms also use the same streams.
Calculation of expiration rate in binary option
However, in financial markets, there is no "real" price for an asset, but still a fork (bid/ask) with a purchase price and sales price. In relation to this, it is the broker who will choose the formula for calculating the expiry level of the binary option. Some use the simple formula: [bid + ask] / 2 (= the middle of spread).
They seek to be more precise by taking into account not only the bid and ask, but also the last traded price.The formula is as follows: [BID + ask + last] / three . It is true that such a calculation is slightly more complicated, but it gives a slightly more realistic approach: The course may well offset (or be particularly large), and therefore the average of the bid and the ask is not really relevant.
To each well informed before you open an account on the calculation method in binary options binary-options-trading24.com. This can be extremely important in determining whether any of the trades are winners or not. Note that if a "high" trader opens a position or "low", and the asset just finished at the same price it was at the opening, he wins (recall that a binary option "high" wins if the course is at or above the level at the opening of the position).