Though binary option trading is a comparatively new industry, it is rather diversified. Presently, there are over ten types of binary options. Today, I will tell you about them.
All types of binary options are based on a single principle, namely, price movement forecasting. No matter what type of binary options you trade, minimum return amounts to 65% to 80%. Actually, all binary options differ in accompanying additional conditions.
Types of Binary Options
Classic Binary Options
This type of binary options is fundamental. It is the base of all types of binary options. This type is also referred to as “Digital option”, “All or nothing”, “Price Higher/Lower” on the Internet, yet this is an ordinary Binary option.
To trade this type of binary options, you choose an underlying security on the broker’s website and check live price charts. Once you have done analysis, you click on the button of the direction of the price (upward or downward), set the term of a binary option and amount of your investment. If the price of the underlying security is in line with your forecast by the moment of expiration, you get a 70% return.
Each broker offers its signature types of binary options. Here is the list of the binary options provided by the world’s top brokers:
AnyOption provides the following types of binary options:
- Binary options
- One Touch
24option offers the following types of binary options:
- High/Low (Classic binary options)
- One Touch
- Boundary (Derivative from One Touch)
- Short term
TopOption provides the following types of binary options:
- Speed Master (actually, you can choose 60 seconds, 90 seconds, and 120 seconds)
- One Touch
- Touch / No touch
- PRO option
As you see, classic binary options top the list of each broker. They are followed by One Touch or Short-term/60 seconds. Unique options like 0-100 or Pairs complete the list.
There are other types of binary options in the world. However, they are not wide spread due to complicated conditions of usage, low return and high risks:
- Vanilla options. Return depends both on the amount by which the price changes and its direction. Duration of a vanilla option can be either a month or a quarter.
- Exotic options
- European options
- American options
- Bermudan options
Each type of binary options has its peculiar conditions. For instance, short-term binary options are bought for a period of half a minute to five minutes. The One Touch binary option allows forecasting rise or fall of the price to a certain level. This option is difficult to forecast, therefore, it’s accompanied by high risks. However, this binary option yields up to 500%!
How to choose a binary option type?
I advise you to trade a classic binary option. Once you have gained experience, you can try new types of binary options. Binary options yielding over 70-80% are accompanied by high risks; therefore, investing in them requires deep analysis.
Moreover, some types of binary options can be bought only for a certain term. This means that your time is limited, and your trade goes with extra risks. For instance, the 0-100 or Option+ binary options have a maximum period of 30 minutes.
Binary options bought for a week and yielding a 350% return also come with high risks. If you divide this return into 5 days, you will understand that making a single profitable trade a day, you get the same return with less risk.