Trading on the options market has its most favorable periods. Certain factors must be considered in order to choose the right effective trading period. They need to be analyzed in more detail.
Periods of activity of world financial exchanges
The session schedule is directly reflected in the statistics (volatility) of certain assets. The biggest activity of the world financial markets starts from 3 a.m., it is the opening of the Asian period. As a rule, at this time the price for assets of Australian dollar and yen changes. Thus the peak of volatility falls on closing of the Asian period exactly at 13 o’clock in the afternoon.
The active European period opens at 9 a.m. Any professional trader knows that during this session, the brightest points of change occur during the period from 9 a.m. to 12 p.m., as well as from 1 p.m. to 3 p.m. This is due to the fact that global trading associations and financial funds have increased working activity during this period of time, which accordingly affects the behavior of the financial market. In European trade, assets containing the euro and Swiss franc are the most volatile.
American trade opens at 4 p.m. It is the largest of all trades with the most volatility. The session closes at 1 a.m. It is during this period that it is most profitable to conduct transactions with assets that contain currency pairs of Canadian and American dollars.
Thus, you can see that there is a certain period of time, in which the American and European periods overlap. Professional traders do not miss this opportunity, because they know that opening bets in this period almost always brings positive results. Not a successful period for opening positions is considered a Pacific session due to its low price mobility. Therefore, it is not so important to describe this period in more detail.
The main news for traders in the world economy
Significant events and changes in the global economy have a significant impact on the movement of asset quotes in option trading. Therefore, to develop a strategy two steps ahead, a trader needs to follow the news of the financial market. Some news have a direct impact on the upcoming price changes, while others do not concern exchange corporations. In order to correctly extract useful information, financial market professionals divide all news into three types.
- Economic news. As a rule, here you can find the statistics of GDP growth, retail price ratio, unemployment rate and so on. On the basis of this information it is quite possible to draw conclusions about price movements of some or other assets. For example, the US dollar lost its stable position compared to other currencies after the news about unemployment in the United States of America.
- Policy news. In this block there are governmental and legal news, important conferences and statements of heads of countries, forecasts of political scientists and economic figures, as well as the results of all kinds of negotiations, summits of countries and much more. On the basis of political news it is not necessary to predict the economic situation and the behavior of financial markets, because they are often not properly defined. For example, the head of the bank makes a statement about the strong position of the national currency for the current period. With such a position, not big falls of the currency are possible, which in fact it is not afraid of. In this message only the second part is more important for traders and financial analysts. If the forecasts of the central bank do not come true, the currency will fall in price. Any political news and messages require more accurate and detailed analysis by traders.
- Analytics news. This block includes news about events in the world, about changes in government circles, military confrontations, natural disasters, results of important government negotiations and so on. The analysis of all the events taking place in the world gives traders a basis for forming personal criteria for evaluating the behavior of world financial exchanges.
Based on the above information, it can be noted that monitoring of all blocks of news, as well as a thorough analysis of them allows traders to predict behavioral factors in the global financial market, growth or decline in asset prices and many other events. Each online trading platform has a calendar of economic news, which indicates the timing of the latest news. For successful options trading it is necessary to choose the right active periods, as well as to constantly follow the news, analyze the events in the world.