One of the best methods to improve your trading results is to understand every aspect of how binary options operate. Learning about how the options are calculated at expiry as a valuable tool to understanding the world of binary options. Expiry calculation refers to how the closing price of binary options is determined. Since many assets employ both a bid and ask price, calculation of the expiry requires a formula to ensure that all expiries are calculated fairly and are reflective of the market.
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Our trading platform calculates the expiry values by using the formulas detailed below. Transparency is the key to understanding the global markets and below you will find the formulas and terms used to calculate the expiry times of all of 24option’s options. Familiarize yourself with terminology and formulas in our Binary Options Glossary and you will be able to better understand the expiry calculation(s) of each option that you invest in with 24option.
Expiry Calculation Terminology
The terms listed below are used at 24option when we describe our methodology of calculating expiry rates:
Bid Price- the bid price refers to the updated market price that is used for selling an asset before the option expiry time.
Ask Price- the ask price refers to the updated market price that is used for buying an asset before the option expiry time.
Last Trade- This term refers to the last price of the purchased asset prior to the expiry time
Last Quoted Index Price- This term refers to the last quote price for an index before the option’s expiry time.
The market prices above that are used by the liquidity provider to calculate the closing prices are received from a third party data feed provider (Leverate).
For any reason, if there is a break in the information stream so that no pricing data is received for the 60 seconds before the expiry time, the data used will be the very first price quote after the option expires.
Asset Level Expiry Calculations
*The market prices that 24Option uses to calculate the expiration values for our binary options types are obtained through our Liquidity provider.
|Type||Expiry Level Formula|
|Indices||The last quoted index price that appears in the data provider field at the expiry time|
|Currency||The sum of the bid and ask price / 2|
|Stocks||The sum of the bid and ask price / 2|
|Commodities||The sum of the bid, ask prices / 2|
Individual Asset Expiry Calculation
To view how the expiry is calculated for individual assets, please see the asset index at the Binary Trading section.
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