Know Your Binary Options Types

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Binary options trading is a growing area of investment, but it is often confusing to those new to it. Fortunately, it is easy enough to summarize. Essentially, a binary option is a way of trading in any market situation. Prices fluctuating wildly can still help traders to make profits at all times; the key is knowing when and how to invest in a trade.

While we cannot cover the different ways you need to do your research and analysis in order to choose the right binary options trades for your goals, we can tell you that there are several different types of investments that you can use to get the best outcome. Whether your research and market analysis has revealed that an underlying asset is going to increase or decrease in value over a specific period of time, you can use one of the following types of binary options to yield profits:

High/Low Options

Also referred to as call and put options, these are the most familiar to any trader and are a good way to get your toes wet in this approach to investing. It takes a broad view of the entire market and lets you place your investment, whether it is going to be lower or higher, by a specific time or date. You can buy or sell, and choose one or the other to lower your initial financial exposure.

Generally, the high/low options have expiration times as quick as five minutes from the time the investment is made and extend up to a day. As an example, your research and analysis may tell you that the market is going to increase rapidly within the next few hours. You can make a trade that backs up that data, and if it is correct, you get the profit.

High/low options can also apply to individual assets, stocks, commodities, currencies, and indices. As the name implies, it can be a trade made on the prediction of an asset trading higher or lower than the initial investment. You have to make that prediction and when it is correct, you have the possibility of receiving up to 70% profits on your initial investment or more.

Touch Options

These are often described as advanced trades because they require the same choice as a high/low option, and your trade has to feature how much the asset will move in that direction. In other words, you must choose a target price, and if the market reaches it, either by increasing or decreasing, you will profit. Touch options often yield tremendous sums, generally in the order of several hundred percent of the initial investment.

Boundary Options

Like touch options, these have target prices, but feature one above current market price and one below. The price has to exceed one of the target prices for the investment to pay out a profit. Noted for being rewarding in volatile climates, this is a trade for times when the outcome of trading is going to be reactive, but also in a direction that no one can predict.

30/60 Second Options

Just as the name implies, these are options that expire within seconds of being made. They operate like high/low options and have shortened timelines to enable quick trading.

Any type of binary option requires some research, analysis, and knowledge of the asset. A mixture of all types can allow for maximum leverage and stability, but only once you’ve done the research and chosen your answer to the yes or no proposition posed by the option.

 


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