There are three diffrent types of options to choose while trading binary options. Each has diffrent specifications and profit ratios. With the help of our detailed explanations, you can clearly choose the best binary option type which fits your trading habits.
Choosing the right binary option type is as important as choosing the right binary option broker because it defines the types of your investments and profits from binary option trading.
Binary Option Type: What is Range Option?
In binary option trading, the Range option is to predict the probability of whether the asset and option value chosen by the investor will be in the predetermined range by the time of expiration.
Binary Option Type: What is Touch Option?
In binary option trading, the Touch Option is a new binary option trading type which is based on the principles of forex trading. Especially binary option trading beginners can easily learn how to make a profit through this option.
Touch Option depends on if assetswill touch the strike price within any time period by the time of expiration . If the investor predicts correctly and the asset touches the strike price the option expires “in the money”. This brings a very high return of between 75% – 85% to the binary option investor.
Binary Option Type: What is Above/Below (High/Low) Option?
In binary option trading, the Above / Below Option is the most popular binary option trading type which is used nowadays. In this binary option type, the investor tries to predict whether the chosen asset will be above or below the predetermined strike price by the time of expiration.
To give an example, if the investor trades gold, then he needs to choose whether the gold price will be above or below the strike price at the end of 1-hour time frame.
If the investor thinks, according to the analyses that he conducted, the gold price will be above the strike price in one hour, he will buy a call option. Otherwise he will buy a put option if he decides that the price will be below the strike price at the end of the expiration.
As can be seen all these factors help the investor to know very easily how much money he will make or lose and determine the risks by himself before starting to trade.
Binary option trading depends on the market analyses and is not gambling. You should carefully choose which type of binary option you are going to trade and master the asset’s market analysis.