Binary Options – Trading

Presented here are a series of options available to those who wish to get involved in binary trading. Many seasoned bettors would choose a simple hourly option with the placement of a basic ‘call’ or ‘put’.

High/Low

This type of Binary Option is very basic and uncomplicated to explain. The majority of Binary Option providers offer this type of binary as a way to trade using a one hour expiry time frame. High/ Low binary trading involves speculating upon whether the price of the asset will close above or below the current price by the point of expiry. In this scenario, a trader will first pick an asset to trade, such as FX, Stocks, Commodities, or Indices), and whatever asset that is selected has its own individual percentage payout, then the trader will pick either a “call” (above) or “put” (below), once the trader has chosen they can then decide upon an investment amount (typically $20 – $10,000) to trade upon. When the trade has been placed the live price at that point is then called the “strike price” (price at point of trade entry), the trader is then required to wait until the point of expiry in order to determine whether they have been successful. This trade has in its favour its simplicity.

One Touch

This is a binary option which offers a payout profile whereby the investor is able to earn significant returns on their opening investment, a return profile can be as low as a 65% return on the initial investment, with 500% not being unheard of. One touch offers a return when the underlying asset attains a certain point in a specific time frame. I.e. this option could pay out 120% if a certain commodity reaches a certain price point by the end of the month. This type of option can be very profitable, however, the wins and losses both can be very profound, and the ups and downs with this type can make or break the trader. Barrier Options/Double “no touch” Options What are known as Barrier Options, such as Double no touch, “Range Binary” or “Double Lock Out” offer the investor the opportunity for a payout at the end, in the instance that the price of the underlying asset does not make or make progress on one of two predetermined barrier levels. The investor is given the ability by this type to choose the barrier level, expiration time, and the amount of payout in the case that the price does not reach or supersede the predetermined limits. This type also allows the investor the right to choose the barrier levels, the expiration point, and also the amount received in the event that the price does not surpass each barrier. There are only two possible outcomes for this option: Breach of the barrier, whereby the investor receives the amount agreed upon at the beginning of the contract. The barrier is not breached, resulting in the loss of the full premium to the investor.

Take Profit

In place of a premium, with Take Profit a trader can obtain the expected return on their chosen option before the stated expiry of their bought binary option, regardless of the determined expiry level of the asset. Commonly provided on particular options and platforms, Take Profit offers a useful ability to reap rewards ahead of the natural course. Although it can show up a lack of confidence and conviction in ones decision.

Roll Forward

Roll Forward is basically a tool with which traders can delay the expiry of their binary option. For the cost of a premium, with Roll Forward, a trader can halt the expiry of their option to the next available expiry time. This option is available on several platforms, within all of which the ability to delay expiry can be used to the traders advantage. That said, traders can often find themselves at a loss with this option as the premiums involved can counteract the primary intention.

60 Second Options

60 second options are a truncated relative of the basic High/Low option. Binary traders using this option have the ability to make multiple trades and positions hinged on a 60 second expiration limit. The majority of platforms that provide this type of option will also suggest “Double Up” (comparable to a Roll Forward or Take profit play, traders have the option to double the placed position and therefore make way for greater reward) and “Protection Return” on each transaction.

Triple Options

Triple options give the trader the ability to hedge their trades and carry out 1 to 3 trades on just one asset. This option is tricky and is not recommend for anyone other than experienced traders who can swallow a hit should the risk backfire.

Matrix

A rather uncommon, or at least lesser known, method of trading Binary Options. This option is complex, convoluted and can easily cause confusion and misunderstandings, it works with the trader attempting to determine the price fluctuation over a set time frame.

Option Builder]

Option Builder lets a trader tailor their approach to employ different techniques in order to make the most out of any given situation. This practice allows the trader to set certain variables such as expiry time and risk level, investment amount, and asset type. This allows the ability to trade within a set of boundaries that are determined by the trader, thus allowing the individual to trade at an advantage based on their understanding of their own strengths and weaknesses. For experienced traders, this method is certainly the favoured and most well rounded option.