Binary Option Types

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Fixed Price Options

The binary options trading industry is experiencing constant changes. Among the latest binary option types that traders have come across in the online financial platform is the Fixed Price options. The option is yet to grace its fame and popularity in the world of binary options trading since it was made available at the end of August and early September.

To begin with, only a few chosen brokers were able to offer the options on their website trading platform. The fixed price option closely resembles that of the strike price. Some of the best binary options brokers that offer fixed price options include:

  • 24option
  • Banc de Binary
  • Opteck.com
  • Eztrader
  • Stockpair

We all know that trading in binary options involves a lot of risks. However, with the right knowledge about the market, investment ideas and proper strategies in place and the company of a professional broker, you cannot fail to make profits trading on commodities, stocks, currencies or indices. You need to be fully aware of all the possible risks that are involved in binary options trading and be prepared to face challenges before placing trades in the binary options industry. Always go for a regulated broker to ensure your money is safe and secure.

Fixed price options can be a useful tool in trading on underlying assets whose strike prices are specific. You will have an urge to buy or sell any of the underlying assets when you look at the stock options. You can use any call options that makes use of fixed-price options to undertake online trading.

A trader can use any of the call options whose strike price is fixed to buy an underlying asset. You need to seek the assistance of a professional or trained broker to assist you with fixed price options to ensure you do not lose your hard-earned funds in trading binary options.

It is not a secret anymore that trading binary options are more versatile than the futures contract. If you can use tactics to conduct a put or call option in the binary options trading, you can be sure of ending up with handsome earnings. The Fixed Price options trading is pretty new. Hence, you need to search for more information about it before plunging into the trading market with the instrument. A broker that provides great guidance will help you to learn a lot from the broker and the trade. Therefore, it is advisable to choose the best brokers in online binary options trading to ensure your utilization of the latest trading options is fruitful while maintaining the fun of the game.

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No Touch Options

These are among the most popular options in the world of binary options trading. However, they prove to be very risky since you have to predict the movement and event in the market during a particular period. If you think that the price of the underlying asset will go up over the range-bound during a specific period, you will find this option to be very useful since you can make much cash if your prediction becomes true. The profits that come from using the option can be large if the period is long. However, you need to be aware that the risk is also great.

Double No-touch Options is the most common type of these instruments. This exotic kind of option allows traders to get a return agreed earlier if the price of the asset goes above two barrier levels. The investor will first pay some premium charges to the broker before he uses the instrument. You will then choose the barrier position, time of expiry and the payout that you should receive in case the price fails to breach or reach either barrier. When using the double no-touch options, the only loss is the setting up cost you will pay, which is normal in the trading process. Remember that there are losses and wins in every trading process. One-touch options are gaining popularity among traders, especially in FOREX markets.

One Touch Options

These instruments involve winning a trade in case the price touches a particular point. The investor is predicting that the price will touch either a support or a resistance point within a certain period. When using this option, you will have to predict if the price of the asset will touch the set strike price upon the expiration of the trade. If your prediction becomes correct, and the actual price of the underlying asset touches the strike price during the expiry time, you will get a determined payout, which usually ranges between 250% and 400%.

Traders who believe that the cost of underlying assets and resources will rise above particular levels shortly can find these touch options to be very useful. You stand to get very high payouts if your prediction becomes true during the expiry time. The instrument is better than other options that only allow a trader to receive a fixed return as profits no matter their amount of investment or whether they were right or wrong.

Weekends are the best time to buy one-touch options since the markets will not be operating. One touch options are also among the most effective means of utilizing your investment and get as much money as possible where you can get as much as 500%.

One touch options
One touch options

Range options

This involves predicting that the price will remain within two strike prices, or it will go through one of the strike prices upon the expiry of the trade. The industry of binary options trading has witnessed an introduction of several new currency options that produce risk profiles that appeal to user constituencies.

Binary range options are neither put nor call option. Instead, they offer an investor with a particular return if their underlying currency in a specific fixed option boundary. The instruments usually set boundary levels higher or lower than the spot price of the currency that the investor used in the trading of the options.

Investors who believe that a specific currency will settle on a particular price of trading can find this instrument very useful and attractive. It implies that they can invest in preset premiums since they will be able to get a maximum payout on their trade no matters the type of their selection. Hence, you can save a lot of money and time since you can recognize maximum risks and returns in advance.

Binary range options are also important since the industry considers them to be among the few options that have a definite structure. When using them, you can take advantage of any decline that occurs within the underlying currency volatility without having any writing options. Additionally, you can find them extremely simple regarding their construction. Hence, you can be able to calculate and estimate their returns without much stress. Furthermore, boundary levels customization enables a broker to engineer options premiums to make them affordable to customers who are on a budget.

Binary Options Range
Binary Options Range

Rebate Options

These instruments are also called cash backs. If you want to cut down the price of your purchase, you can use these options. They are usually one of the two choices that traders make during the process of negotiating a specific trade’s price. The reduction of the interest rate is the second choice that traders may take.

A broker usually provides clients rebate options as a way of enticing traders to buy particular trades. During short transactions, dividends and interest portions that lenders or shareowners earn are also paid to borrowers of shares. One of the most crucial things that a trader needs to know is that FOREX rebate options are also called cash back to eliminate confusion.

If you have an interest in participating in rebate options, you can easily receive them by arranging with your online broker. As much as various companies offer these options as well, you need to take time in choosing the company that will work well for you since different deals exist.

During the transactions of options, you can receive a profit when the options expire worthlessly. Barrier rebate options are those monetary derivative products that expire automatically when the underlying assets go up to certain prices. During this time, you will end up receiving back a specific portion of premiums that you paid.

You can only be able to use barrier rebate options when the price of the underlying assets reaches preset prices. The options can be “knock-in,” which means you can exercise the contract when the underlying assets prices go over or below the specified price barriers.

On the other hand, “knock-out” barrier rebate options are those where the contract expire automatically when the price of the underlying assets goes up or down below the barrier prices. Options contracts will allow you to buy or sell financial assets at prices that were predetermined before specified future dates. The options also offer investors with compensation when the “knock-out” occurs. Since rebate options reduce the profit of the writer, they are not common in the binary options industry.

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Author: Michael Allen

Michael Allen is the main author at www.binaryoptionrobotinfo.com. He holds a PhD in Economics and has worked in investment banking for 24 years.