Different Types of Binary Options
The liberalization of business and the advancement of technology continue to influence the market. It is because new products and new ways of doing things are developing every time. The binary options market has not been left behind because practitioners have developed several types to facilitate investment in the market.
Visit the website http://cybermentors.org.uk to learn more about the different types of binary options. As a trader, you only need to choose the kind that will meet your expectations based on your ability to predict and speculate prices in the dynamic business environment.
High-low binary option
It is the most common binary option in the market also known as the fixed-return. It provides access to foreign exchange market, commodities, indices, and stock. It comes with a fixed trading period set at the beginning of the investment. It also has a strike price, which is the fixed price set at the beginning of trading to inform the fixed return you will get as an investor upon the expiry of the option.
In this type of binary option, if your prediction was correct and the price increases at the expiry date, you get a profit; however, if the price falls, you run at a loss. This means that it relies on your ability to predict prices in the market considering the economic conditions such as market volatility, economic fluctuations, as well as various financial indicators.
One touch binary option
One touch is an option in which a target level determines whether the trader makes a profit or a loss. In this kind of binary option, an investor has to choose a specific target, which is either below or above the current asset price. The mark chosen should occur before the expiry of the fixed trading period for the investor to make a profit.
However, if the predicted mark does not occur during the trading period, then you lose your investment. The specific target is set at the beginning of the option date and must be hit before the end date. In this type of financial investment, there is full discloser of the risks involved as well as the expected reward right from the beginning of the trading date.
A range binary option
The third type is the range option, which enables you to choose a price range within which you speculate the asset to trade until the end date. If the price of the asset remains within the selected range, then you get your profit. However, if the price does not remain within the predicted range, then you lose your investment.
What are common in all these three types of binary options are the fixed trading period as well as full discloser of the reward and risks involved in the investment.