Binary Options Types – All Listed and Explained

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Options Types

Discover the Large Variety of Binary Options Types!

Binary options form a special and individually determined segment from trading activity in general. All of them are intriguing with their specifications and interesting ways for earning additional moneys. Even if you are a beginner, you can easily and quickly start your trading experience with binary options, because they are simple to be learnt and understood. So do not hesitate to discover the large variety of binary option types that are available on the market and among the most trustworthy binary trading brokers. Learning the details about each of them is essential part of your overall financial trading education – whether it is professional, or started as a hobby!

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What Is Binary Option?

To become aware of the different binary option types, it is preferable to get to know the binary options trading in general at first. So, let`s say few words about binary options and what exactly they are. There are numerous legal and unofficial definitions behind the term of “binary option”. However, the best way to understand this financial instrument is the following: a binary option is a way of trading on the market and it is estimated by the underlying asset performance in a particular period of time. In other words, when you trade with binary option, you usually have two options – if an event or prediction will happen and how close you are to this prediction.
Binary options trading allows the traders to make one single trade by choosing between only two investment possibilities. In most cases you prediction is whether the price will rise, or drop. And the most important thing in binary option activity is to choose the right asset. This is the first thing you need to do before making your trade. With binary trading, you can choose all the available assets that are generally applied in Forex trading – such as foreign currency pairs, commodities, stocks, indices and etc. Last, but not least, binary options have expiry time, which is either strictly or formally fixed time, when you have to see if your prediction has become a reality.

What Are the Different Types of Binary Trading Options?

We have finally reached the main part of our review for different binary options in financial trading. Here is the list of all the common and not so traditional binary options you can find on the market and use to make some additional outcome for your budget.

A digital option can be also found by the name up/down option, as well as call/put option. In all these cases we talk about one single term. In trading with digital binary options your mission is to consider whether the price of the selected asset will drop/rise. What you have to predict is whether the binary option will appear at higher or lower rate after the expiry time.

One Touch Binary Option

One touch binary options lets you to consider if the underlying asset will reach a particular level of value that you have predicted in advance. In case the market price gets this boundary level before the expiry time, a trader can earn up to 100% profit on one touch binary option trade. Read more about one touch binary options.

No Touch Binary Option

When you trade with no touch binary option, you will be paid once the level is not reached. These binaries are mostly chosen by the high punters, if you get used to its rules and basics, even if you are a beginner, you can trade with them, as well. Read more about No touch binary options.

60 Seconds Binary Option

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The 60 seconds binary option is one of the most popular binary trading choices among the audience. The good thing about this binary is the fact that if the price of an asset goes on a particular direction, you can easily conduct your prediction according to this direction. The interesting thing about the 60 seconds binary option is that the rewards are quite quick, while the payment is performed almost instantly in most brokers. 60 seconds binary options are types of short-term binary options, which can be also 2-minute, 15-minute, 1-hour and etc binary option type. The common thing between all of them is the fact the expiry time is always fixed and you know when the result will come. Read more about 60 seconds binary options.

Boundary Binary Option

The boundary binary option is also known as tunnel or range binary option and it is very similar to the mentioned above touch binary. The two levels are determined and what you have to do is to reach a level, where the asset is somewhere in this boundary in order to be paid. Read more about Boundary binary options

Other Binary Options

With the fast growing of the financial trading services field and trading in general, the binary option types have been increasing as a number and there are many other types you can meet on your way to advance in trading. Moreover – some traders invent their own binary options to get even better trading strategy with binaries. Here are some other types of binary options variations:

How to Discover the Best Brokers for Binary Options?

Now when you know the different types of binary options you must be asking yourself where to find the best ones. The question does not have one single obvious answer since various traders have various interests and needs. Moreover, most of the brokers that offer binary trading offer almost all kinds of the common binary options. This means that the important task for you is not to find the best and most profitable binary options to trade with, but to discover a broker that provide most of them and have good and reliable environment, where you can trade safely and confidently. Such a broker must have proper software – preferably a web-based and a mobile version as an alternative – as well as strong reputation, good regulation and perfect customer support services. Additional extras like education centers, attractive binary options bonuses and availability of several account types – including personal account manager opportunity – could get you an extra pleasure and comfort, while you are trading. However, if you are already in a search for such a broker, see the following tips to come upon on a website that really worth it for your future binary options trading activity.

  • Get recommendations – Begin your detailed search of a nice broker with all the best binary options with some recommendations. The most excellent sources for such recommendations could be friends or familiar people of yours that have more experience in trading than you. These people are aware of what a beginner needs and even more aware of the good places for trading with binary options.
  • Use your browser smartly – It is fantastic to have that large web of answers for all of your questions – including about the best brokers with binary options. So, do not hesitate to use your favorite browser and its search engine to get the list of the platforms you would like to visit and check if they suit your needs. Simply, insert keywords like “best binary options broker” or “broker for binary options trading” and consider the results you will be shown. Be aware, because some of these brokers might have amazing advertising campaign that put them on the highest ranks in search engines, but they cannot be called trustworthy at all.
  • Read reviews – Reading full and detailed binary options broker reviews is probably the best opportunity for you. Besides, giving you detailed information – shortly presented to save you time and energy – you will also get familiar with the conditions for trading on a particular website. Note that these reviews are extremely helpful and recommended for beginners, who usually have the weak point to entrust in a broker too fast before even making a research about it. Well, a short review of a broker is an ideal resource for such a research.

As a conclusion, we need to tell you that no matter how various binary options can be, they usually follow the same philosophy and are generally composed by the same rules and terms. It could be well for you to meet all the different types of binary options and eventually to estimate which are the most beneficial and profitable for you. Usually, a trader with little experience in trading with binary options is completely capable to value the opportunities that come from each of them. So begin your journey of discovering all the binary options right away and it will take only few months for you to become a total expert in such a trading activity. Finally, you will get your answers and you will manage to arrange your binary options trading strategy in a best way!

A Guide to Trading Binary Options in the U.S.

Binary options are financial options that come with one of two payoff options: a fixed amount or nothing at all. That’s why they’re called binary options—because there is no other settlement possible. The premise behind a binary option is a simple yes or no proposition: Will an underlying asset be above a certain price at a certain time?

Traders place trades based on whether they believe the answer is yes or no, making it one of the simplest financial assets to trade. This simplicity has resulted in broad appeal among traders and newcomers to the financial markets. As simple as it may seem, traders should fully understand how binary options work, what markets and time frames they can trade with binary options, advantages, and disadvantages of these products, and which companies are legally authorized to provide binary options to U.S. residents.

Binary options traded outside the U.S. are typically structured differently than binaries available on U.S. exchanges. When considering speculating or hedging, binary options are an alternative—but only if the trader fully understands the two potential outcomes of these exotic options.

Now that you know some of the basics, read on to find out more about binary options, how they operate, and how you can trade them in the United States.

U.S. Binary Options Explained

Binary options provide a way to trade markets with capped risk and capped profit potential, based on a yes or no proposition.

Let’s take the following question as an example: Will the price of gold be above $1,250 at 1:30 p.m. today?

If you believe it will be, you buy the binary option. If you think gold will be below $1,250 at 1:30 p.m., then you sell this binary option. The price of a binary option is always between $0 and $100, and just like other financial markets, there is a bid and ask price.

The above binary may be trading at $42.50 (bid) and $44.50 (offer) at 1 p.m. If you buy the binary option right then, you will pay $44.50. If you decide to sell right then, you’ll sell at $42.50.

Let’s assume you decide to buy at $44.50. If at 1:30 p.m. the price of gold is above $1,250, your option expires and it becomes worth $100. You make a profit of $100—$44.50 = $55.50 (minus fees). This is called being in the money. But if the price of gold is below $1,250 at 1:30 p.m., the option expires at $0. Therefore you lose the $44.50 invested. This called out of the money.

The bid and offer fluctuate until the option expires. You can close your position at any time before expiry to lock in a profit or a reduce a loss, compared to letting it expire out of the money.

A Zero-Sum Game

Eventually, every option settles at $100 or $0—$100 if the binary option proposition is true and $0 if it turns out to be false. Thus, each binary option has a total value potential of $100, and it is a zero-sum game—what you make, someone else loses, and what you lose, someone else makes.

Each trader must put up the capital for their side of the trade. In the examples above, you purchased an option at $44.50, and someone sold you that option. Your maximum risk is $44.50 if the option settles at $0, and so the trade costs you $44.50. The person who sold to you has a maximum risk of $55.50 if the option settles at $100—$100 – $44.50 = $55.50.

A trader may purchase multiple contracts if desired. Here’s another example:

  • NASDAQ US Tech 100 index > $3,784 (11 a.m.).

The current bid and offer are $74.00 and $80.00, respectively. If you think the index will be above $3,784 at 11 a.m., you buy the binary option at $80, or place a bid at a lower price and hope someone sells to you at that price. If you think the index will be below $3,784 at that time, you sell at $74.00, or place an offer above that price and hope someone buys it from you.

You decide to sell at $74.00, believing the index is going to fall below $3,784 (called the strike price) by 11 a.m. And if you really like the trade, you can sell (or buy) multiple contracts.

Figure 1 shows a trade to sell five contracts (size) at $74.00. The Nadex platform automatically calculates your maximum loss and gain when you create an order, called a ticket.

Nadex Trade Ticket with Max Profit and Max Loss (Figure 1)

What Are Binary Options Trading? – Binary Options Explained With Example

Binary Options trading are known for their simplicity and all-or-nothing nature. Moreover, a few reasons are behind to give this trading type name binary option. Options are derivative instruments. It can be traded as forex pairs, cryptos, stocks, indices, commodities, etc.

Furthermore, for traders, it is a lucrative trading type because of it’s quick and high return percentage. But, according to the research, binary traders should pay close attention to the rules of trading before diving with real money.

So, consider this article as a guideline for beginners and hence, we will keep it as simple as possible. Let us start with the binary definition first.

What Is Binary Options Trading?

Abe Cofnas is a thought leader and analyst in the financial industry. We took a line from his book to explain the actual meaning of binary.

“The binary option is called binary because it fits the condition of being either right or wrong-all or nothing.”

On the other hand, the exotic option allows a trader to speculate on the price movements of various instruments. To trade binary option, you don’t need to purchase an underlying asset.

You rather predict whether the price will increase above, or decrease below the strike price or purchase rate. The strike price is the price, at which traders trade underlying assets. Market price must increase or decrease, by the time the trade expires.

The expiry period for binary options is very diverse. The time frame starts from 30 seconds and lasts up to a year. After prediction the price, you will select the call or put option, depending on the asset price movement.

If you guess accurately, you win a payout. But the wrong prediction will give you nothing. It is required to mention that the payout rate differs from asset to asset and broker to broker.

Speaking of assets, there are multiple trading instruments that you can trade as binary options. Before selecting any pair, find some strategies and rules on how to trade binary options .

We will explain all the terms and facts of the binary option below that will give you more knowledge to understand.

Best Binary Options Brokers 2020:
  • Binarium

    1st Place! Best Binary Broker 2020!
    Best Choice for Beginners — Free Education + Free Demo Acc!
    Sign-up and Get Big Bonus:

  • Binomo

    2nd place! Good choice!

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