By registering with a broker, the trader has the choice between different types of binary options. It is necessary to learn how these binary options work in order to make your trades profitable and to earn profits. Depending on the broker you choose, you will have at your disposal some types of binary options, as well as different possible returns. Therefore, the regulated broker that offers different assets and a variety of binary options is the most interesting one, whether you are a new trader or an experienced trader.
The simplest binary options are recommended for novice traders, while more experienced traders can try their hand at complex binary options. So here are the different kinds of binary options and their principles.
This is the most classic form of binary option, and also the most used by traders. A classic option which consists of betting on the rise or fall of a given asset until its expiration (a stock market company, a currency pair, a precious metal or a stock index). At expiration, if the trader is right, he is “in the money” and is rewarded with a return that varies between 60% and 90% of the amount of his trade, which is a nice sum if the amount of the trade is large. On the other hand, if he is wrong, he is “out of the money” and loses the amount of the trade he invested.
Les options Zone
The Zone option, also known as the Boundary option or Zone In/Out option is also a fairly simple binary option that is popular with novice traders. It consists of betting on whether or not the chosen asset ends up in a predefined value zone at maturity
At maturity, if you bet that the Asset would end up in the Zone or “In”, and it does, you have won your bet and the corresponding return. On the other hand, if you bet “Out”, you will have lost the amount of the trade.
Les options One touch
One Touch Options are another form of binary option, which are somewhat similar to the Zone Option, except that the Zone Option determines whether the asset will reach a certain threshold at expiration.
The particularity of this binary option is that if the asset reaches the threshold value before the maturity date, the trade is closed and the trader receives his gains. On the other hand, if the asset does not reach the determined threshold value, the trader will lose what he has invested in the trade.
The No Touch options
Operating on the opposite principle to the One Touch Option, the No Touch Option consists of predicting whether the asset will exceed a threshold at expiration.
If the asset reaches this threshold before maturity, the trade is closed and the trader loses the money he invested, while if the asset does not reach the threshold at maturity, the trader will make money. As with the One touch option, this is a risky and very high return option.
The 60 second options
This form of binary option is similar to the classic High/low option, but it has the particularity of having a 60-second expiry. This means that the trader has to decide quickly whether the asset will go up or down in the next minute and is exposed to a high risk. This option is therefore presented with a high return, especially if you trade during the overlapping hours. The 60 second option can make you make a lot of money in a very short period of time, or on the contrary you can do what you invested.
Pair options are a completely different type of binary option. They differ from other binary options by the fact that it is on two pairs of assets that the trader will speculate. In other words, the idea is to speculate on which asset will outperform the other in terms of value at maturity. For example, when comparing the performance of Facebook and Apple, the trader must choose the asset that performs well. If at maturity, the trader has made the right prediction, he makes money.
There are therefore a variety of binary options. Novice traders will be able to get started with Pair Options, High/Low Options and Zone Options, while more experienced traders will seek to maximize their gains with One Touch/No Touch Options and 60 Second Options. Traders will also have trading tools to increase your gains or delay the expiration date.
If you are a beginner, using a demo account will make it easier for you to approach and test the different options mentioned above.
Now you know all about the different options available depending on the broker. To tackle the other essential points do not hesitate to reread the essential basics for novices.