Quarterly closures are closely correlated to the assets one can trade in binary options trading. That is, the information released on a quarterly basis is considered to be of significance and can lead to asset price movements. In return, having this type of information can lead to major rewards when incorporated into your trading strategy. While it is true that anyone can trade binary options without any experience at all, having an understanding of market movements and the factors which impact these movements can boost your trading success. For this reason, understanding quarterly closures and what they mean in terms of the market, is vital. One may wonder what quarterly closures are and what role they play in binary options trading, so let us look at this further.
In a year, there are four divided quarters. They include; January to March, April to June, July to September and October to December. In any government organization, or public organization, reports are issued at the end of every quarter. On an annual basis, these months include; April, July, October, and January. These four months are considered as corporate seasons and they really influence markets and in turn, the price of assets. The reason for this is that the revenue gauges and profits of any organization are issued on each quarter. This information is then analyzed to determine how this will impact the relevant asset prices in the future.
The large scale companies that are highly ranked in the major market indices use the technique of business quarters to report their income, calendars, revenue and more. Likewise, governments’ monetary execution reports are calculated through distributing the Gross Domestic Product (GDP) on a quarterly basis. Quarterly reports also highlight any major changes in forecasts for any organization and it provides traders with the platform to compare the organization’s earnings to others in its industry. If we look at an example, you will be able to get some more insight into quarterly reports. In this example, let us assume that Google speculates that its second quarter revenue will be at $150 billion with profits of $40 billion. In July, the company reports revenue of only $140 billion and profits of only $30 billion for the months of April, May and June. When the financial specialists step in, they will analyze the figures for the quarter and since the results came in under the speculated amount, it is most likely that the price of Google shares will drop. In this case, making a Put option trade makes sense.
It is important to note that when earnings reports are released on a quarterly basis, analysts in the market dedicate a lot of time to analyze the future state of the organization including the short-term and long-term value of its stock. That is, in many cases, stocks react to the anticipation of the release of the earnings, the actual results as well as the markets commentary towards this release. Within a few weeks of the release, we often see a lot of movement in the relevant stock prices. There is also a long term effect where for example, if a company has performed well in their earnings release, the question then arises if the company can maintain these top results in the long run.
As a binary options trader, you can use the information provided in quarterly reports as binary options signals which pinpoint you in the right direction when it comes to potentially profitable trading opportunities. Take the time to read market news and stay updated with major events in the markets. In this way, you are able to fine tune your trading predictions.