There are different types of Binary Options available to trade. This can seem a bit confusing for a new trader and some experienced traders.
Types of Binary Options
Operators can choose the method that best suits their needs. Experienced traders choose different methods depending on current market conditions and how they expect markets to react to outside influences, announcements, results, trends, or other conditions.
The most common is the Digital Option or often referred to as the UP / DOWN Option and the CALL / PUT Option.
The trader makes a CALL if he thinks the price will end above the entry price after the expiration of the contract and a PUT if he thinks the price will end below the entry price.
You simply must determine if the digital option will end at a higher or lower interest rate than the active exchange rate when you entered the trade.
Various expiration periods are available, including 60 seconds, 15 minutes, 1 hour, end of day, etc. Once you have committed to the operation, the platform automatically monitors your operation and exits at the indicated time without the need for you to log into the system. Normally you will be sent an email notification with the closing status of each transaction.
You can easily track the status of ongoing trades on the Trading Platform or from your account’s portfolio page.
The option Touch Binary Option It is another method of trading binary options. It has a number of varieties including TOUCH, NO TOUCH, and DOUBLE TOUCH.
It comes with the pre-defined rates necessary to win the trade, instead of the trader simply predicting whether the value of the underlying asset will rise or fall, he / she predicts a level that it will reach (touch) or not reach (no touch). This can be a level higher or lower than the current price of the asset.
Options can only be bought during the weekend when the trading markets are closed. Then it is negotiated during the week. If the asset touches or has passed the specific level at 17:00 GMT on Monday, the system declares a win, and the trader receives a predefined payout of up to 500% in some cases. If you are out, trading will continue in the same way until Friday when the platform expires, continually checking each day to see if the price has reached the rate necessary for a win. This gives the operator 5 days and 5 chances to hit the target.
DO NOT TOUCH – pays when the defined level is not reached and with DOUBLE TOUCH two levels are defined, paying when one or the other level is reached.
One Touch is ideal for traders who believe that the price of an underlying asset will reach the predefined level in the future, but who are unsure of the sustainability of this price.
Option 60 Seconds
This method expires in 60 seconds and is becoming more and more popular. The advantage of 60 seconds of trading is that if the value of an asset is clearly moving in one direction, the trader can make the most of it by carrying out a series of successive trades to maximize his profit. This makes the platform ideal for traders who are excited about the prospect of quick rewards and who are able to respond quickly and effectively to sudden market movements.
Essentially, this method is the same as the Digital Option with very short expiration times and used by traders to quickly profit from a trending market.
This method is sometimes known as the range option or tunnel option and is similar to the touch option, but in this method two levels are defined. The upper and lower levels (the limit or range) are defined and the trader needs the asset to stay within this limit to receive a payment. Some brokers will allow trading on payment on the asset breakdown of this limit.
Variations of this method are those in which the asset must remain within bounds (or break out of bounds) and in which the asset ends within bounds (or ends out of bounds).
This method is ideal in a stable market when trading within limits and in a volatile market when trading outside limits.
Some brokers have different methods available or allow the trader to create their own methods. For example, Banc de Binary has a method called BinaryMETA that allows the trader to sell early or double his money mid-trade.
The method BinaryMETA provides the operator with analytical tools that allow him to follow the history of an asset from the moment it begins to trade. To review the history, the operator simply clicks the back or forward buttons for “1 hour” or “10 minutes”. Also, they can see the options they have placed directly on the chart. This allows them to analyze their options and make decisions in real time like the professionals do.