Main Types of Binary Options

Many binary option traders started off trading with the common high-low binary option. Once they are more experienced, many binary option traders will look to more advanced types of options to get an edge on the market.

Note that even the term binary option carries different meaning depending on where you reside. In this article, we are talking about the more popular variety, which is the european binary option traded outside the United States.

High-Low Binary Options

This is the most common type of binary option used by novice traders. Traders buy a call if they expect the underlying price to go up or a put if they expect the underlying price to go down.

One Touch Binary Options

When a trader purchases a one-touch binary option, a payout is earned when the underlying asset price reaches or surpasses a specific price barrier anytime before the option expires.

No Touch Binary Option

Conversely, for a no-touch binary option, a payout is earned when the underlying asset price does not reach or surpass a specific price barrier before the option expires.

Double One Touch/No Touch Options

With double touch/no touch binary options, there are two price barriers - namely the upper or lower price barrier - for the underlying asset price to either hit or miss in order to receive a payout.



Continue Reading...

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