A binary option’s expiry time determines when its outcome is tested. Settlement determines what that outcome pays and how the payment reaches your trading account. They are connected, but they are not necessarily simultaneous.
In binary options trading, predicting the right direction is not enough. The contract’s condition must be satisfied at the required time, using the required reference price. A market can move in your favor for most of the trade and still finish on the wrong side of the threshold.
This article focuses on price-based contracts assessed at expiry. Check the actual terms before trading: the deadline, price source, treatment of equality and settlement procedure matter more than the countdown animation.
Expiry, Trading Cutoff and Settlement Are Different
The expiry is the contractual endpoint for assessing the proposition. The trading cutoff is the last opportunity to transact in that contract. Settlement is the process of applying the result and paying the amount due. A contract’s rules may place these events together or separate them.
For the cash-or-nothing structure discussed here, a position held through expiry produces the predetermined cash payment or no payment. Exercise is automatic; you do not submit an instruction to receive the underlying shares, currency or commodity. The SEC’s explanation of binary options distinguishes this from conventional options that provide a right to buy or sell an asset.
| Stage | What it means | What to check |
|---|---|---|
| Order acceptance | Your trade becomes an executed position. | The accepted contract, price, quantity and timestamp. |
| Trading cutoff | Trading in the contract ends. | Whether this occurs before the outcome is determined. |
| Expiry | The contractual deadline for the outcome test arrives. | The date, time zone and reference observation period. |
| Settlement | The outcome is applied and the payment processed. | The official result, payment amount and account entry. |
| Withdrawal | You request a transfer out of the account. | Available funds and the separate withdrawal procedure. |
A completed countdown does not, by itself, establish that cash is ready to withdraw. Equally, a pending account entry should not be mistaken for a still-tradable position.
Fixed Expiry Times Versus Duration From Entry
A fixed expiry identifies a shared clock time, such as 10:35 a.m. A duration-based contract instead runs for a stated interval from the start defined in its terms. Those arrangements can produce different holding periods even when both are presented with a “five-minute” label.
Suppose a hypothetical contract expires at 10:35 a.m. If you enter at 10:32:20 a.m., you have two minutes and forty seconds remaining. You have not bought five minutes from your own entry. By contrast, a contract defined as five minutes from acceptance at 10:32:20 a.m. would expire at 10:37:20 a.m.
Read the accepted expiry timestamp, not just the product label. Also distinguish the time you press the order button from the time the order is accepted. If the contract measures duration from acceptance, your device’s click time is not the controlling timestamp.
Check the stated time zone and its treatment of daylight saving time. Avoid converting an exchange deadline using a remembered UTC offset. Around clock changes, record both the venue’s timestamp and your local equivalent.
The chart interval is separate again. A five-minute candle groups price observations; it does not establish a five-minute contract’s start or finish. Using the candle’s closing time as a substitute for the contract deadline can mean assessing the wrong period entirely.
How the Expiration Price Is Calculated
The expiration price, sometimes called the expiration value, is the reference number used to test the contract. It should not be confused with the price paid for the option or the cash payment received after a successful outcome.
Do not assume the reference number is simply the last visible chart price. Read whether the terms use a named market’s trade price, a bid or ask quotation, a midpoint, an average over an observation window, or an official settlement value. These methods answer different questions.
A related yes/no contract provides a concrete example. CDNA’s April 9, 2026 EUR/USD event-contract filing specifies a calculation using bid/ask midpoints collected before trading closes, with high and low observations removed before the remainder is averaged. It also includes sampling and rounding rules. That is a contract-defined benchmark, not a screenshot of the last tick.
Consider a simplified hypothetical contract that uses the arithmetic average of five observations. Four observations are 100.00 and the final observation is 100.10. The resulting average is 100.02. A contract requiring a value above 100.05 would fail, even though the final observation was above that threshold.
The practical implication is straightforward: compare like with like. Before challenging a settlement using another chart, establish that both use the same underlying instrument, data source, observation period and precision. A spot currency quotation is not interchangeable with a currency futures price.
A disagreement between two displays deserves investigation. It does not, on its own, prove that the contractual calculation was wrong.
What Happens When the Price Equals the Strike?
Equality is not automatically a draw. The strike is the threshold being tested, and the wording determines which side receives payment when the official expiration value lands exactly on it.
“Above 100.00” excludes 100.00. “At or above 100.00” includes it. If a contract offers the opposite side of the proposition “above 100.00,” that opposite side includes equality. But do not assume every product uses that structure.
The COMEX event-contract rules provide an explicit example: the call pays when the underlying settlement price is strictly above the strike, while the put pays when it is equal to or below the strike. Under those rules, equality is allocated to the put rather than refunded.
Display precision can complicate the comparison. Two numbers shown as 1.0850 might differ at another decimal place. Alternatively, the settlement formula may require rounding before comparison. Neither the shorter display nor the extra digits automatically control; the published calculation does.
For a disputed result near the strike, request the official expiration value at the precision used for settlement. Then apply the contract’s comparison rule. “It looked equal on my screen” is a starting point for checking, not a complete calculation.
The Settlement Payment Is Not Your Profit
A winning settlement amount and a trading profit are different figures. Your cost of entering the position still has to come out of the payment.
Suppose a hypothetical contract costs $42 and pays $100 if its condition is met. A winning settlement produces $58 profit before fees. A losing settlement pays zero, leaving a $42 loss before fees. The $100 is the gross payment, not an extra $100 on top of the purchase price.
A stake-and-return presentation uses different labels. If a hypothetical $10 stake promises an 80% net return on success, the winning account credit would be $18: the $10 stake plus $8 profit. Under a full-loss condition, an unsuccessful trade would return nothing.
These examples illustrate accounting, not current product offers. Check whether the displayed “payout” includes the original stake, and whether charges apply at entry, exit or settlement. The separate guide to binary options payouts and break-even win rates covers how that payment structure affects the success rate required to cover losses.
Can You Close a Binary Option Before Expiry?
Sometimes, but early closure is a contract and venue feature, not a universal right. Closing a tradable position also differs from exercising it early: you exit the position through a transaction rather than demand its final settlement payment.
Some exchange event contracts allow positions to be closed before the outcome is determined. CME Group’s event-contract FAQs describe that possibility. It should not be read as a promise that every binary contract, on every platform, offers the same exit.
If an exit requires a matching order, you need an executable price and sufficient quantity. A displayed valuation is not necessarily an available exit price. Nor does placing an order establish that the position has closed: check the execution confirmation and remaining quantity.
Suppose you buy a hypothetical contract for $42 and later sell it for $61. Your realized gain is $19 before fees. You have given up the later settlement payment in exchange for the exit proceeds. If the same position later settles at zero or $100, that outcome no longer determines your profit.
Execution arrangements are one reason the distinction between exchange-traded and OTC binary options matters. Check whether exiting requires another participant’s order or a discretionary quote from the provider.
Do not treat “rollover” or “extend” buttons as a harmless way to postpone a loss. Establish whether the action changes the contract, closes and replaces it, or creates another position with a fresh cost. None of those actions erases money already lost.
Choosing an Expiry That Matches the Proposition
There is no universally best binary options expiry time. The useful question is whether the deadline matches what you are trying to assess.
A view that a currency may rise over several hours says little about whether it will be above a threshold sixty seconds from now. Shortening the expiry does not make that broader forecast more precise. Extending it does not guarantee that a temporary adverse move will reverse either.
Separate the forecast into three parts: the required price level, the deadline and the observation method. “The market should rise” is incomplete. “The official reference value must exceed this strike at this expiry” is a testable proposition.
Before considering a position, check:
- Time remaining: Use the accepted expiry, not the duration suggested by the product name.
- Events before expiry: Identify scheduled announcements that could change the premise of the trade.
- Observation window: Know whether the outcome uses one observation or a calculation covering several.
- Exit assumptions: Do not base the decision on an early closure that the contract does not guarantee.
Test results should also keep expiries separate. A method evaluated on hourly observations has not thereby been tested on one-minute outcomes. Pooling those trades can hide which deadline, if any, the method actually handles.
Delayed Settlement and Disputed Results
A delay between expiry and final settlement needs an explanation, but delay alone is not proof of misconduct. Contract rules can address missing or unreliable reference data. Trading may still stop at the original deadline even when the settlement calculation cannot yet be completed.
The COMEX rules referenced above illustrate this distinction: when a reliable underlying settlement price cannot be established, final settlement can be deferred while trading still ends at the scheduled expiry. Waiting for a valid reference value is different from allowing fresh trades or arbitrarily moving the outcome test.
For a disputed result, preserve the trade confirmation, contract identifier, accepted expiry and time zone, strike, position size and applicable terms. Request the official reference value, calculation method, fees and account ledger entry. Keep relevant screenshots, but use them alongside the contract record rather than instead of it.
Arbitrary deadline changes are a more serious warning. The joint CFTC and SEC binary options fraud alert describes complaints alleging that platforms extended winning trades’ countdowns until they became losses. It also identifies refusal to credit accounts or return funds as reported fraud patterns.
Ask for a written explanation tied to a published rule. A vague reference to “market conditions” does not reproduce the calculation. Avoid depositing more money simply because support claims that doing so will fix an unexplained settlement problem.
If the records suggest altered prices, changed deadlines or fabricated account entries, the guide to fake trading platforms and manipulated results covers those warning signs in more detail.
The practical standard is simple: you should be able to identify the contractual deadline, reproduce the outcome test and reconcile the resulting payment. If those steps remain unclear before entry, leave the contract alone.