Impact of Quarterly Closures on Binary Options Trading

Impact of Quarterly Closures on Binary Options Trading

Submitted by adil on Thu, 07/24/2014 - 21:00

How Are Quarterly Closures Related to Binary Options?

Many traders in the binary options market want to know what quarterly closures are and how they are related to binary options. You should know that quarterly disclosures and binary options are closely related to each other. You can get a chance to earn profits by trading binary options if you learn the basics of quarterly closures.

A large number of companies that are quoted on the indexes market use a tool known as the business quarter technique to report the incomes, benefits and destinations in the same way as governments report the spendings of their countries by spreading their GDP on quarterly basis. This technique makes it easier for the traders to identify the important events on the business date-book of these companies.

As you all know, one year has four quarters. Governments and companies produce their financial statements at the end of each quarter in April, July, October and January. They are considered as the corporate seasons and are represented as key events because they can have a strong impact on the stock market.

Companies earn their income and derive profit from the exchanges quite early in the quarter and therefore, the information related to that quarter will be readily available for the traders to enable them to take their decisions for the next quarter. It provides a standard for rating agencies and business investigators so that they can keep their focus on the actual income of the corporate seasons. Let’s take an example of a listed company (i.e. Apple Inc.) with the assumed figures. Suppose, Apple has predicted that the income  is expected to be 140 billion dollars for the second quarter with the profit of 30 billion dollars. The company issues the report in July, stating that it earned a revenue of 130 billion dollars with the profit of 15 billion dollars that was earned between April and June. This will enable the financial experts to get to see the actual figure instead of assumed figures. As a result, the value of company shares declines sharply, which triggers another downward trend for the weeks to come.

Many companies use this technique during the corporate seasons and traders normally wait for the income and profit reports in order to compare them with the expected stats. If the actual results are better than the expected figures, you are in an ideal situation to enter a call paired options. However, if the actual result does not turn out to be in your favor and are worse than the expected results, you should  consider entering put options. The expert review of the market analysts is also of key importance. It helps you take a reasonable decision about binary options trading as they provide their expert opinions and reviews by critically evaluating the results of each company. This information has proven to be very successful for the traders to make a trading decision.

Therefore, if you want to successfully trade during the quarterly closures, you should keep all the elements including, expected results, financial reports and the information provided by the analyst so that you can place profitable trades in the market.