Types of Binary Options

When most people hear of Binary Options they will only have a brief understanding of this type of financial investment. Most articles will discuss the basics of trading Binary Options but may not discuss the many types of options that are actually available. There are five main types of Binary Options that can be traded through a reliable broker. These include cash or nothing, asset or nothing, one touch, no touch and double one touch or double no touch. Most references to trading Binary Options will be based on the cash or nothing model, but it is important for traders to be aware of these other options as well.

The cash or nothing Binary Options are the most popular. With this type, a stake price will be determined and a contract will be bought for a Call or a Put, depending on whether the trader thinks the asset price will rise or fall. With these options, there is a fixed return that is usually between 170% and 200%. In some cases, brokers will offer a 10% or 15% return even when they lose their stake. Asset or nothing options are almost the same as cash or nothing. With these, the payout will be determined by the price of the asset instead of an arbitrary stake.

A one touch Binary Option is also common and this works a bit differently. With these options, the contract will end once the asset reached a predetermined level. With these, the investor will simply be deciding whether the price will reach that level or not. A no touch option in the exact opposite and traders will choose that the asset will not reach the predetermined price.

Double touch Binary Options are similar to the single counterparts but there is one important distinction between the two options. Instead of there being a single predetermined price, there are two prices. The asset price must touch on both prices in order for the contract to pay out. These five options are offered at most brokers and traders will find that with these choices, Binary Options trading can become quite exciting and rewarding.

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