The length of time of the contract can very from less than a minute to a year. Each length of time will have advantages and disadvantages. There are none that are inherently better, although some may be better for a particular trader’s situation. For example, day traders and people hoping to make fast money often prefer daily options that expire at the end of a business day or even options that are expiring in the next few minutes. These short time frames also are used by long term investors who wish to “hedge” their long term holdings on a volatile day by offsetting losses. In addition, people playing the binary options market for fun will probably enjoy this faster pace.
Longer contract times are sometimes better for more casual investors because they do not require constant management and keeping up with different markets. People who are familiar with an industry may choose to capitalize on this familiarity by purchasing special “event-based contracts” that allow binary options trading with an expiration date that is set after a press release or other industry event. This can be especially profitable for a casual trader who is familiar enough with the industry in question to predict the resulting changes in value after the event.
