Binary options are fast becoming popular as a trading source due to its simplicity. As indicated by the name, this means of trading offers only two possibilities. Either one is rewarded with a predetermined sum of money or one does not win anything at all. The binary trading can be broadly classified into two, asset-or-nothing, and cash-or-nothing. The former offers the payment in the form of asset while the latter pays in the form of cash. Depending upon the expiration time set, the trading can be either long term or short term.
Different Binary Option Types
Binary options are available in many forms, although the basic concept remains the same. The trader is required to estimate the direction of movement of the price of the asset and then decide the option accordingly. One of the main advantages of binary options trading is that it allows the different ranges of asset and can be quite diverse including indices, currencies, stocks, or commodities. Some of the varieties of binary options include:
- Pair Options are the latest types of binary options. Like the name, the options are based on the contest between the performances of two assets. The trader is required to select which of the asset in the pair will out-perform the other within the expiration time.
- The concept of Touch options involves setting a specific value and predicting if the asset price will reach that determined value within the expiration time. The trader decides between Touch and No Touch. Some brokers also allow the traders to estimate if the value if higher or lower than the current price.
- In Range or Boundary options, a gap or range is determined and the trader must predict if the price will be within the gap, indicated by In, or exceed the gap, indicated by Out. The estimation must be based within the expiration time.
- The basic binary options, also called as digital option, are very popular as they are easy to understand and implement. The traders choose the Put option to indicate that they predict that the price of the asset will come down within the expiration time. The Call option can be chosen to indicate that they predict the asset price will go up within the expiration time.
Choosing Reliable Binary Options Brokers
When selecting a binary options broker, the field expertise of the broker is quite essential. Many broker platforms also offer instructional videos and tutorials explaining the concept of binary trading to the amateur investors. The transactions should be transparent and flexible. Selecting a broker platform that supports a wide variety of payment options like bank transfers and plastic money is quite advantageous. This ensures that one has the flexibility to make suitable payments as per one’s convenience. A broker platform that provides comprehensive and reliable customer support for their investors is recommended as they can resolve the various queries and doubts about the trading. Many trading broker platforms support client interaction in the form of emails, live chat, and telephonic support.