Types of Binary Options You Should Know

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Types of Binary Options You Should Know

As with forex trading, with binary options trading you have a handful of types of orders available. We’ll make a list of them and you should use them in order to fully understand their purpose

Why is it important to know all the type of orders available and not just stick to a few?

Because the market behaves in different ways and by knowing all the types of orders available, you can adapt to different circumstances and manage to profit from unexpected movements.

Also, by knowing all the order types that are available out there, you can use it as a way to choose your broker. Not all the brokers are offering a wide variety of binary options orders so you should focus on the ones who do.

High/low binary option – this type of order requires you to speculate whether a particular asset will be higher or lower. The key moment is the expiration time, that’s when the price should be higher/lower, depending on how you place your order.

Call/ put binary option – one of the most popular types of orders, similar to the one above. Also, another important type is the 60 seconds binary option, commonly used by traders.

One touch binary option – a trader can profit from this kind of order when the price of a particular asset reaches a predetermined level, also known as trigger. It is very helpful when the market is moving impulsively in a particular direction.

No touch binary option – as opposed to the one touch binary option, the no touch order requires that a particular asset won’t reach a predefined level, before the expiration time.

Double No touch / Touch binary options – The same rules apply as above, only this time the option will have two triggers, not just one.

Range binary option – this type of order requires that the price of a particular asset should trade in between a top level and a bottom level, aka range, before the expiration date. If the price won’t break the range before that, you will be in the money zone and make profit.

Short-term binary options – there are a lot of binary options categories included here and the difference between them is the expiration date. 60 seconds, 2 minutes or 5 minutes are the most popular and can be used to speculate small moves of prices.

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  • Binarium
    Binarium

    Best Choice! The leader in our ranking!
    Perfect for beginners!
    Free Demo Acc + Free Trading Education!

  • Binomo
    Binomo

    Good choice for experienced traders!

With that being said, these are the most important type of binary options orders you should know and make sure the broker that you choose will have them available for you.

Types of Binary Options You Should Know

If you are relatively new to the binary options industry, then you probably do not have too many information about the variety of binary options you have at your disposal. That is exactly why we’ve written this material – to make you familiar with some of the basic types of binary options you could use.

Option #1 One touch

The “One touch” binary option is basically an order that becomes profitable when the market reaches a certain level after the order had been placed. That level is also known as “trigger” in the trading jargon.

It is a very effective option, especially when the market is moving impulsively in a certain direction. It also carries a high level of risks, since the market needs to reach your trigger in order for you to make money. A well-established money management system is a must in this situation. Since there is a high level of risk, the payouts are also big, with some brokers reaching more than 300%.

If the trigger is very close to the current price, then the payout will be smaller. In the opposite scenario, it will be higher.

Option #2 No touch

This is a type of binary option that works in opposition to the one touch option. You basically are setting a level that won’t be reached by the market in a pre-determined period of time. This time, if the trigger is close to the current price, the payout will be high, and small in the opposite scenario. You have to consider very carefully the trading time ideal for binary options.

Large swings can hit your trigger and thus you will lose money.

Option #3 Double no touch

In this case, there are actually two triggers and the market needs to fluctuate between them, without touching them. If the market will reach only one of those, you will be “out-of-money” and your capital at risk will be lost.

This is an effective binary option, especially in times when the markets are ranging or consolidating. If volatility is high, this is not the right binary option you should consider.

To conclude, these three are just some of the binary options you have at your disposal. In a future article we will discuss other ones as well, but in the meantime try to test the ones above.

Binary Option Types

Trading with binary options can be a lot of fun – not only because they are easy to learn and they provide opportunities to gain a large amount of money in a short period of time, but also because this trading activity comes with a large number of different alternatives that you can use to trade profitably. The reason for this is hidden behind the fact that the market – respectively the different brokerage companies – offers a diverse abundance of different binary option types. Learning them is not only recommended, but considered mandatory for you, because once you are equipped with the necessary knowledge you will be able to build up the best trading strategy.

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Why is It So Important to Be Aware of The Different Binary Option Types?

Before listing the different binary option types for you– with details and a simple explanation of each – we must say few words regarding understanding them. Some of you might not be so eager to learn new things – especially if you are in the early phase of your trading education and the amount of information seems too much for you. You may ask us “Isn’t it better to focus on a particular binary option type in order to make it even simpler when it comes to trading in a real environment and in real time on the market?”. Well, no, it is not. On the contrary – there are many advantages of knowing the entire list of binary option types. And if you still have any doubt about it, read about them below:

  • Becoming a professional in trading is a must – If you think that being an average trader will allow you to earn a decent profit, you are wrong. On the contrary – to highlight the best of your analytical skills and for the best trading opportunities you should be armed with a high knowledge base. And when it comes to binary options trading, knowing the types of binary options is the least you must know to be prepared.
  • The more binary options available, the more options to profit – The more binary options you trade, the more opportunities you will have to eventually increase your final outcome. This is not a trading maxim, this is in general a lifetime axiom. When you have more opportunities to try, the potential to gain what you are struggling for increases.
  • Adjusting to the market movements – It is essential to adjust your binary options trading strategy to the market movements. To this end, we suggest that you constantly keep up to date on the economy and news flow relating to the economy at all times. These are your main sources of important facts to consider and then to trade utilising this information. With binaries things are the same. Some binary options would be more preferable in a certain market, however, others will not be suitable for trading when the same event takes place.
  • Improving your education and skills – Practice is everything, and the deeper experience you have, the more advanced you will become as a trader with binary options. However, there is no way for you to advance and to practice your skills or knowledge if you are trading only with the binaries you are aware of. It is better to become an expert in each of them.
  • Knowing your strong points – Keep in mind that some traders are considered professionals in 60 seconds binary options, but others just cannot get used to them and they prefer the one touch binaries. If you know all the binary option types and you start practicing trading with each of them, eventually you will see in which one you are an expert and you will focus your strategy to this particular type of a binary.

Discover the Different Types of Binary Options Now

And finally we have reached the main part of our binary option types theme. Let`s review and learn the list of binary option types together! Are you ready? Well, let`s get started then.

High / Low Binary Option Type

The high / low binary options make you ask yourself a question whether the traded asset you have selected will eventually become higher or lower than the previously announced value. The key moment is the expiration date – aka the time, when your prediction is supposed to happen. Note that in trading with these binaries the payout for each trade is predetermined in advance and it is always transparent to you. In most cases you are able to select to sell the option at any time before expiry, for a partial return.

Put / Call Binary Option Type

This binary option type is highly popular amongst traders. But be aware that it is similar to the previously mentioned high / low binary option type. So whatever term you see, the meaning and the explanation, as well as the binary trading philosophy remains the same.
Another good type of options is 60 second binary option which is one of the most common instruments of the binary options traders.

One Touch Binary Option Type

The one touch binary option pays out the trader`s profit once the price of the underlying asset reaches a predetermined barrier. This barrier is known by the term “trigger”. Once the trigger level has been reached, you will be able to get your final outcome – either a profit, or no return. One touch binary options are one of the most preferred types for the trader in the case when he is 100% confident that the asset’s value will generate a strong move in a particular direction (up or down) and will hit the trigger value.

No Touch Binary Option Type

No touch binary option is the opposite of the previously mentioned one touch binary options. With no touch binary you decide whether the underlying asset will not be able to reach the particular value level. Though, just like one touch binary, the trader is supposed to choose the certain price amount above or below the present price through the market changes. Your trade determines if the price will not reach the determined level during the mentioned expiry date.

Double No Touch / Touch Binary Option Type

In both cases – no touch and touch – a double binary option type has the same philosophy as the previously two mentioned option types with the difference that there are two triggers here. Each trigger covers each side of the market price.

Range Binary Option Type

This type of an option usually refers to the high / low binary option type. The difference appears when the trader determines the direction and upper and lower limits of the price change, which is the suggested range. If the option expires without breaching this range, you will receive your profit, because you will be in the money.

Boundary Binary Option Type

Trading with boundary binary option suggests the same methods as those from range binary option type. On the other side, the similarity to the touch binary option – one and no touch – is also very obvious. Here, though, you define two levels of the asset price. A deeper explanation of boundary binary options is here.

Short-term Binary Option Type

The short term binary option is the high / low binary option. Though, here the periods of time are shorter than the previously mentioned 15 minutes. Short-term binary options can be the following types: 60-Seconds, 2-minutes and 5-minutes. These binaries are very preferred by the trading community since they are very quick for trading and even quicker, when it comes to the expiration time and the payout execution. Though, you need some very strong intuition and good skills in fast reaction to the market changes if you want to trade with the short-term binary options types.
Imagine that you are already on the best binary options broker site– what binary option type will you prefer? Isn’t it just better to consider testing and trying them all till you find out which one you are good at? Different binary option types might distinguish according their expiration date, as well as according to their specifications, but all of them are excellent ways to make fast money without the necessity of huge analysis and reading. Consider each of these types and do not hesitate to share your experience with them! We wish you good luck and great trading experience with the binaries!

Best Binary Options Brokers: 2020 Ranking
  • Binarium
    Binarium

    Best Choice! The leader in our ranking!
    Perfect for beginners!
    Free Demo Acc + Free Trading Education!

  • Binomo
    Binomo

    Good choice for experienced traders!

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