Different types of binary options trades

Types of binary options

Binary options trading offers a wide range of options for traders to choose from and each binary broker has its own set of trading conditions and provides a different selection of options. Some of the most common types, as compiled by our experts, are as follows:

1. High/Low

The most basic and popular type of binary option is the High/Low option. In this type of option, the trader predicts whether the price of the underlying asset will rise above or fall below a certain level at the time of expiration.

2. One Touch/No Touch

One Touch options are a type of binary option where the trader predicts whether the price of the underlying asset will reach a certain level at any point before the option expires. No Touch options are the opposite, where the trader predicts that the price will not reach a certain level.

3. Boundary/Range

Boundary options, also known as Range options, are a type of binary option where the trader predicts whether the price of the underlying asset will stay within a certain range or fall outside of it at the time of expiration.

4. Ladder

Ladder options are a type of binary option where the trader predicts whether the price of the underlying asset will reach certain predetermined levels at the time of expiration. These predetermined levels are known as "rungs" of the ladder.

5. Spread options

Spread options are a type of binary option where the trader predicts whether the price of the underlying asset will be higher or lower than a certain level at the time of expiration. This type of option is similar to High/Low options but with a different payout structure.

6. Option Builder

Option Builder is a type of binary option where the trader can customize the option to suit their individual preferences. This includes setting the expiry time, the level of risk, and the potential payout.

Other types of binary options include:

1. Short-term options: These options have expiration times ranging from 30 seconds to 5 minutes.

2. Long-term options: These options have expiration times ranging from the end of the day to the end of the month or even year.

3. Pairs options: These options allow a trader to trade one asset against another and predict which asset will perform better.

4. FX/CFD options: These options are similar to traditional options but based on foreign exchange and Contracts for Differences (CFD) markets.

It is important to note that not all brokers offer all types of binary options, so it is essential to research the options available with a particular broker before trading. Also, it's crucial to understand the essence of each type of option and the risks involved before investing in them.

Please note that the above table is for the general representation of difficulty/risk level and the maximum payout for each of the types of binary options and that the actual difficulty and payout may vary from broker to broker. In addition, the difficulty/risk level and the maximum payout may depend on the asset you choose to trade. So do your own research before you begin your binary options trading journey.

Types of binary options by an expiration period

Another way of classifying binary options is by their expiration period. This can include:

1. Turbo options These options have an extremely short expiration period, often as little as 60 seconds. They are also known as "60-second options" and are considered high-risk options due to their fast-paced nature.

2. Short-term options: These options have an expiration period of several minutes to a few hours. They are moderately risky and can be a good option for traders who want to make quick profits.

3. Medium-term options: These options have an expiration period of several hours to several days. They are considered to be less risky than short-term options but riskier than long-term options.

4. Long-term options: These options have an expiration period of several days to several weeks or even months. They are considered low-risk options and can be a good option for traders who want to hold their positions for a more extended period of time.

5. 30-second options: These options have an extremely short expiration period of 30 seconds. They are also considered to be high-risk options due to their fast-paced nature.

Again, it is important to note that not all brokers offer all types of options by expiration period. Hence, it is important to research the options available with a particular broker before trading. Also, it's crucial to understand the essence of each type of option and the risks involved before investing in them.

Binary trades examples

Experts have drafted the following examples of trades in different types of binary options:

1. High/Low: A trader believes that the price of Gold will increase in the next hour. The trader buys a "call" option with a strike price of $1,800 and an expiry time of one hour. If the price of Gold does indeed increase above $1,800 within the next hour, the trader will receive a payout of, let’s say 75%, depending on the broker.

2. One Touch: A trader believes that the price of the Euro will reach a certain level within the next three days. The trader buys a "One Touch" option with a strike price of $1.20 and an expiry time of three days. If the price of the Euro reaches $1.20 within the next three days, the trader will receive a payout of, let’s say 550%, depending on the broker.

3. Boundary/Range: A trader believes that the price of Apple stock will stay within a certain range over the next week. The trader buys a "Boundary" option with a lower range of $120, an upper range of $130, and an expiry time of one week. If the price of Apple stock stays within the $120-$130 range over the next week, the trader will receive a payout of, let’s say 75%, depending on the broker.

4. Ladder: A trader believes that the price of Crude Oil will reach certain predetermined levels at the time of expiration. The trader buys a "Ladder" option with predetermined levels of $85, $90, and $110 and an expiry time of one month. If the price of Bitcoin reaches $110 at the time of expiration, the trader will receive an approximated payout of, let’s say 1500%, depending on the broker.

Please note that these are examples, and the actual payout and expiry time may vary depending on the broker and the market conditions. Also, it's important to note that these are purely hypothetical examples, and the outcome of a trade can never be guaranteed.

TOP-3 Best binary option brokers

1

9.4/10

Go to broker

Your capital is at risk.

Minimum deposit:

$5

Review

CloseOption is a binary options broker that was registered in Georgia in 2013 and operates under the supervision of the National Bank of Georgia. It provides its clients with trading in pairs with fiat currencies and cryptocurrencies through a proprietary web platform. CloseOption’s services are used by over 2 million traders worldwide, including the United States. The broker specializes in active options trading but also offers an affiliate program to generate passive income. More than ten payment systems are available to CloseOption clients for depositing and withdrawing funds, with the majority of them allowing fee-free transactions.

Pros/Cons

•licensed by a reputable financial regulator;

•loyal first deposit of $5;

•size of payments increases as trading volumes increase;

•money prizes for trading with virtual funds;

•many ways to contact technical support that operates 24/7.

•a small range of trading assets;

•clients cannot trade with leverage;

•payments on accounts with small deposits are lower than those of competing brokers.

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2

9.2/10

Study Review

Minimum deposit:

$250

Review

Nadex is a binary options broker working mostly with US and EU traders. The company was founded in 2009, officially registered in the State of Illinois, and regulated by US law. The broker's regulator is the CFTC (Commodity Futures Trading Commission). The main competitive advantage of Nadex is its completely transparent work, controlled by one of the most reputable regulators in the world. A distinctive feature of the broker is unique binary options products and direct access to the US exchanges.

Pros/Cons

•regulation by CFTC;

•binary options toolkit is easy to use.

•the broker works through an intermediary from the EU;

•commission for each trade is US$1;

•limited range of offered products (3 types of options);

•all information on the site is in English only;

•complex verification procedure that meets the requirements of US legislation;

•high entry threshold - $250;

•there is a flat fee for withdrawing money - $25.

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3

9.1/10

Go to broker

Your capital is at risk.

Minimum deposit:

$5

Review

The Pocket Option broker is part of Gembell Limited holding, which was founded by a group of professionals seasoned in trading and investment activities. The company is mass-market requirements-based, therefore, it provides quality services to binary options trading in the OTC market access. The broker strives to make the trading process as simple, clear, and convenient as possible. For this reason, Pocket Option has developed a unique trading platform to ensure stable trading for traders and investors.

Pros/Cons

•low threshold for entering the market; the first deposit starts at $5;

•social trading platform generates passive income.

•not licensed by any reputable regulator;

•to trade Forex through MetaTrader 5, you need to deposit at least $1,000;

•support service responds within 24-48 hours, which is also too slow.

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