Consider the types of binary options, or as they are also called "Fixed contracts", where the cost of loss or profit is known.
BO brokers offer to work with several types of binary options, the matter is not limited to Call/Put alone.
Some of them offer payouts of more than 100%, but the risk also increases, newcomers in pursuit of maximum profit often do not pay attention to this and lose money.
Today we will understand the existing types of BOs and which binary options are best for you.
Types of binary options
Since the beginning of the appearance of binary options as a financial instrument for trading on the market, more than ten types of them have appeared. There is a high probability that their number will grow every year.
This trend is due to the development and change of the market, as well as the desire of brokers to provide their users with as many modern, flexible and convenient tools as possible.
Each brokerage site provides its own types of binary options. We will introduce you to the most famous types that really work and are used by the world's leading brokers.
Interpretation from English Call / Put means Up / Down or Above / Below - essentially the same thing.
This type of contracts was originally called binary options, and therefore is a classic. In addition, it is used by all brokers.
The main meaning of the option under consideration is the determination by traders of an increase or decrease in the value of the selected asset, at the time when the contract ends.
At the same time, its price at the time of the transaction is taken as the comparative value of the asset. In the slang of traders, the initial value of an asset is called the strike price.
The main advantages of this option include its simplicity and versatility. This type of option is perfect for both novice traders and professional traders with extensive trading experience.
The high yield of a binary option can range from 70% to 90%.
The main advantage of the Up / Down option is the optimal ratio of income to risks. Traders have the opportunity to make transactions of different durations according to the expiration time.
The minimum time period can be a few minutes, and the maximum is a little less than a year. If we compare this binary option with other types of options, then it does not have any disadvantages.
To make a profit, the price must be above the buy level (for Call options) or below (Put options) at the time of the option expiration.
Distance plays no role. This is the most popular type of binary options, all BO brokers have it without exception.
60 Seconds (Turbo options)
The so-called "TURBO OPTIONS" is an exact copy of the Up/Down binary option, with the only difference being that it has an expiration time of sixty seconds. This type of contracts appeared a little later than the classic Up/Down.
Short-term asset sales can range from thirty seconds to five minutes. The main advantage of this type of binary option is making a profit in a short period of time, that is, within one minute..
Shortly after that, options were made for an even shorter period, namely, for 30 seconds. To make money in such short time periods, you need high skill.
So far, exotic, only a few brokers offer them. The trader bets whether the price will be higher or lower relative to the buy level after a certain number of ticks.
It is impossible to predict the number of ticks. The price, for example, during high volatility can change several times in 1 second, and during a calm period, it can not change for several minutes.
A pure lottery, especially if the market is highly volatile, in which case the price can change several times per second and it is impossible to predict where the chart will be relative to the purchase level.
This type of binary options appeared almost immediately after the Up/Down option.
The meaning of this type is that when a predetermined level of asset value is reached within a specified period of time, the option is considered to be successfully worked out.
To better understand, let's take a simple example.
For example, a company's share price is $1,600. The trader bets on the fact that within a certain time the price will reach a minimum of $1625.
If during the specified period of time specified in the option, the share price will be $1625 or more, then the trader will make money.
The main disadvantage of this type of option is that in most cases the price of the asset set by the trader is far from the current position. Therefore, the financial markets must undergo rapid changes in order for the share price to be able to catch up with the predicted price.
Most of all, this type of trading is suitable during the news.
For this type of BO, payments are offered more than 100%, and sometimes they can reach up to 400-500%, due to the huge risk and extremely low probability of making a profit.
To make a profit, the price must touch the level set by the broker before the option expires. The further the level and the calmer the market, the more the payout is offered, but the probability of success is lower.
This type of binary options is a modified version of One Touch.
The main differences are in the terms of the contract and its profitability. At the same time, the boundary price levels that can be set are much closer to the current value of the asset.
It is recommended to use this type of options for experienced traders.
This type of options appeared quite recently, but has already managed to gain trust and popularity among some traders.
The meaning of the option under consideration is that the trader needs to predict which one of the two underlying assets will sell best for a given period of time. In terms of profitability, this contract is comparable to the classic one.
The conditions for making a profit are the same as for the Call / Put option, the main feature is that a synthetic chart is used for trading.
It was obtained by multiplying/dividing two regular charts, as a result, a trader can work with such instruments as Gold/Silver, Google/Alphabet, etc. Not available for all brokers, there are time limits.
Working with this option is better for those traders who have experience and are familiar with asset price fluctuations in a pair. For beginners, the option in question is quite complicated, since you need to keep track of each position and choose the one that has great prospects.
A fairly easy method of trading, which consists in predicting the price in the allotted corridor.
The essence is simple: you choose a trading pair and choose the time during which the price will not go beyond the proposed range or will go out.
A certain corridor is set, if the price does not go beyond it before the option expires, then the transaction is closed in the money. Different brokers may have different names for this option, it may be called, for example, Range.
This type of trading is suitable for trading before the news - for a breakdown of the range or in a flat - to keep the price in the range.
Out of range
The conditions are reversed, that is, in order to make a profit, it is necessary that the price before the expiration of the option goes beyond the range specified by the broker.
A complex type of binary options trading, which involves predicting that the price will go beyond the specified level and gain a foothold there. All this should be completed within the allotted time frame.
The level is set, above/below which the price must be in order for the trader to make a profit.
Which ones really work?
All types of binary options will really work if you have the right trading strategy.
Each type requires a trading technique, it will be difficult to optimize the trading rules of a single strategy for each type of BO.
You need to try and test which strategy will work best on a certain type of fixed contracts.
In trading, we recommend betting on stability, and leave the pursuit of easy money to adventurers, none of whom will become a stable earning trader in the future.
What type to choose?
Most traders working in the binary options market trade Call/Put options (long- and short-term, as well as pairs) - the optimal ratio of risk and potential profit.
It is better not to touch the touch and ladder options at all - the risk of being left with nothing is too great. You can try to make money before the release of important news, but brokers at such moments usually insure themselves and cancel the opportunity to trade these types of BOs.
Range and out of range options can also be used, but relatively few brokers have them.
Ignore tick options. Working with them has nothing to do with trading - you can just as well play in a casino, the probability of earning is the same.
Most, of course, trade in the classic UP/DOWN, and this is quite enough.
If you do not yet have much experience in this area, try different types of working binary options with a small financial investment and find the best tools for yourself that will allow you to receive a stable income in the future.