1-Day Binary Options

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Written By
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Written By
William Berg
William contributes to several investment websites, leveraging his experience as a consultant for IPOs in the Nordic market and background providing localization for forex trading software. William has worked as a writer and fact-checker for a long row of financial publications.
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Edited By
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Edited By
Tobias Robinson
Tobias is a partner at DayTrading.com, director of a UK limited company and active trader. He has over 25 years of experience in the financial industry and contributed via CySec to the regulatory response to digital options and CFD trading in Europe. Toby’s expertise and dedication to financial education make him a trusted voice in the industry, including a BBC investigation into digital options.
Updated

1-day binary options trading is a fast-paced investment style. Hold your nerve for 24 hours with a simple price prediction on popular markets like stocks, forex and commodities. This guide explains how 1-day binary options contracts work, beginner-friendly strategies, plus steps to start trading. We also list the best brokers for trading 1-day binary options in 2024.

Binary Options Brokers

#1
Pocket Option
Bonus
50% Deposit Bonus
#2
Deriv.com
#3
Quotex
Bonus
30% Deposit Bonus

List all Binary Options Brokers

What Are 1-Day Binary Options?

Binary options are a straightforward derivative product used to speculate on financial markets, such as the Nasdaq. As the name suggests, 1-day binary options expire after 24 hours. Investors simply make a straightforward bet on the future price of an asset. For example, will the price of gold be higher in 24 hours versus its value now? If the trader is correct they win a fixed payout, while if the prediction is wrong, they lose their initial deposit.

1-day binary options are arguably less risky than contracts with a tighter timeframe, for example, 60 seconds. However, as with all forms of trading, there is always an element of risk involved.

Example

Let’s say a trader wants to speculate on the GBP/USD forex pair…

The current market rate is listed as 1.18. Based on some prior research and knowledge of the market, the investor predicts that the value of the US Dollar will increase in the next 24 hours. With this in mind, the trader invests $100 and the broker offers a pay-out of 70%.

If at the 24 hour expiry, the rate is higher than 1.18, the investor receives the $100 stake plus $70 in profit. However, if the market rate stays the same or drops after 1 day, the trader loses their $100 initial investment.

Pros Of Trading 1-Day Binary Options

Cons Of Trading 1-Day Binary Options

Strategy Tips

Inexperienced investors can lose money if they trade without a plan. The best strategies combine technical and fundamental analysis and take into account the specific expiry time, for example, 1 day. So consider the following when developing a plan:

Indicators

Many of the best binary options day traders use technical indicators to identify patterns and trends in underlying markets. Leading platforms offer a suite of free indicators that can be downloaded and added to graphs and charts. But with sometimes thousands of technical indicators available, we have listed a few particularly useful options for investors trading 1-day binary options:

Risk Management

The best 1-day binary options trading strategies incorporate a considered approach to risk management. Seasoned traders, for example, often follow a maximum 5% rule, meaning they only invest 5% of their total capital per trade. This means a couple of bad trades won’t wipe out your trading pot.

Note, you can increase the percentage as you develop and refine a consistently profitable strategy.

Signals

Signals are another useful tool for novice traders. Signals alert investors to potential trades and can be delivered via SMS straight to mobile devices. Algorithms or expert market analysts essentially do the heavy lifting, allowing you to buy and sell based on recommendations. Just make sure you read reviews and customer ratings before paying for a service. Some of the best brokers for trading 1-day binary options also offer free signals.

Emotional Control

Binary options day trading requires emotional resilience. The volatile nature of financial markets can lead to hasty decision making. With that in mind, we recommend that beginners practise holding their nerve in a free demo account before putting cash on the line.

Algorithms

Once you have established a successful 1-day binary options trading strategy, you may want to consider automating your plan. Trading bots will automatically enter and exit positions based on agreed criteria. These instructions can be set by you, the trader. Alternatively, you could buy a pre-existing bot from a central hub like the MetaTrader Market.

Regulatory Considerations

Day trading binary options is not legal in every country. In 2018, European regulators prohibited the sale or promotion of binary and digital options to retail investors in the EEA. This included those under the authority of the UK Financial Conduct Authority (FCA). Concerns centred around pricing models where investors were being offered high returns for lower probability events and low returns for higher probability events. The European Securities and Markets Authority (ESMA) believed this, alongside short expiry times, encouraged addictive trading behaviours.

Following a crackdown on misleading brands, many binary options brokers are offering more transparent trading services with clear pricing schedules and risk percentages. Retail traders can now sign up with various onshore and offshore providers with high customer ratings.

Final Word On Trading 1-Day Binary Options

Day trading binary options is an exciting yet high stake investment style. To succeed you will need to take a careful approach to market research, have a defined risk management plan, and make use of your broker’s trading tools. For beginners, it could also be worth getting familiar with 1-day binary options on a demo account before investing money.

FAQs

What Are 1-Day Binary Options?

One-day binary options trading involves price speculation within a 24-hour time frame. Traders must predict whether the price of an underlying asset will be above or below a certain price at the end of the period. Correct predictions will result in an automatic pay-out while incorrect predictions will mean the loss of your initial deposit.

Which Global Brokers Offer 1-Day Binary Options Trading?

Online brokers that offer 1-day binary options trading include BinaryCent, RaceOption, Pocket Option and IQ Option.

Binary options trading is legal in some countries, however, some regulatory authorities have banned the concept, regardless of the expiry time. In the US, India, Singapore, China and Australia, among others, retail traders can invest in binary options though some local restrictions may apply.

Can Anyone Participate In 1-Day Binary Options Trading?

Yes – anyone can invest in binary options if they are legal in your area and you open an account with a supporting broker. However, trading 1-day binary options does come with risk, so we recommend using a demo account until you feel confident investing real funds.

How Can I Succeed Trading 1-Day Binary Options?

There is no universal method for successfully trading 1-day binary options. Research previous market trends and utilize the tools, indicators and educational content offered by your online broker. It may also be a good idea to practise trading in a demo setting before risking capital.