Believe it or not there is more to offer with binary options than simply the traditional digital binary options that many traders use to make profits. Understanding the different types of binary options available for trading can provide any beginner trader with more assets that they can use to develop their trading strategy. The types of binary options can help you to develop strategies based off of current market conditions and utilize trends in the market for profit. Here are some of the main types of binary options that you can get started trading.
1. Digital options
These are some of the most common binary options that we can think of. These digital options are usually traded through online trading platforms and allow the trader to select either an up or down option based off of their own speculations for the way an asset will move with the market. An up option contract is where the trader feels as though an asset will end up profitable upon its expiry date versus the entry price of the contract. A down option or put option is used in digital options when a trader believes that an asset will fall below its entry-level price at the expiry of the option contract. Using these types of digital options can be very quick and easy especially for short-term trades. Digital options also make it easy to follow multiple trades at once through an account portfolio page.
2. Touch options
This type of binary option is a little bit different than our traditional idea of binary options. With tai chi option trades a trader can perform double touch, no touch and touch contracts. Essentially touch contracts involve prediction of the market as well. A touch option assumes that the value of an asset will reach a predetermined profitability margin before the expiration date of the option is reached. No touch options assume that the predetermined profitability margin will not be reached. Double touches occur when defined payout periods are included with the options contract resulting in two chances for profitability. When traders begin to get very good at speculation and feel as though an asset may reach a predefined level in the near future touch options can be very profitable forms of binary options.
These are just two of the main types of binary options which are available to potential investors. With a few other types available, binary options can offer an extremely lucrative market for experienced investors.