Types of Binary Options

There are a variety of binary options that can be traded. Understanding the difference between them is essential if you want to make a profit from your trades. As an investor you will need to know how each type of binary option works so that you can choose the best one and earn money with every trade.

Digital Options

Digital options, often referred to as All or Nothing options are by far the most commonly traded because they are the easiest to understand and predict. An investor places a Call/Up options if he speculates that the price of the underlying asset will increase or a Put/Down option if he believes the price will decrease. With a digital option there is no need to be concerned about how much the price has changed. You will earn a payout as long as you have chosen the correct direction.

Touch Options

A Touch option is another type of binary options trade. Instead of predicting the direction of movement you will need to decide if the price of the asset will touch (reach) a preset value. You can trade a Touch option if you believe the price will touch the required value or a No Touch option if you think it won’t. In this category you also have Double Touch and No Double Touch options. These trades have two preset values and a Double Touch Option will pay out if the asset reaches either of the values and the No Double Touch pays if the asset doesn’t reach either value.

These specific options are special because they are usually traded on a Friday. If your prediction touches on Monday then you will earn your profit. Otherwise these trades usually have until the end of the week to touch the predetermined price. These options can be tricky to predict but they offer return rates of up to 500%.

Boundary Options

You may hear these referred to as Range or Tunnel options. When you trade a Boundary option two price points will be set and you will have to predict whether the asset’s value will remain inside these boundaries or will move outside of them. Trading inside the boundaries is ideal when the market is stable while a trade prediction that the price will move out of the boundaries is better in a volatile market.

60 Second Options

Every option has an expiry time and with a 60 Second option you can earn a profit in 1 minute. As you would with a binary options trade, you will need to choose between a Call and Put option. There is a definite appeal to turning a profit in just 60 seconds but you need to be ready to make a trade at any moment. 60 Second options are best when an asset’s price is clearly moving in one direction.

Vote this post

See our rankings of binary options brokers : Take a look at our comparison tool to see the best binary options brokers and compare welcome bonuses, return on loss, minimum deposit and maximum gain !

Binary options where to start ↓