“Binary” means “one or the other” but it doesn’t necessarily mean choosing between Call and Put. Recently, more and more binary brokers offer Binary Options of the type that chooses between Touch and No Touch, In and Out, as well as other choices.
Let’s take a closer look at the 4 most important Binary Options types and why they can enhance our profits.
- Calls or Puts – you choose whether the price will go Up or Down – the most common type.
- Touch or No Touch – you choose whether the price will touch or not touch a certain price point
- Double Touch / Double No Touch – similar to touch/no touch, however you need to choose two price points
- Range Options – you choose if the price will be inside or outside a price range. Sometimes referred to as Boundary Trading or Tunnel Betting
This new breed of options to trade is gaining popularity fast, as it can fit different market situations, for easier and more flexible trading. For example, when the market is not trending strongly it makes much more sense to trade range options or touch options, rater than the normal call/put.
This augments the already strong popularity of Binary Options, which enables traders to know their risk in advance and know their expected return for that risk.
Call or Put
The standard and most popular of all binary options as they are the easiest to understand. You can also find them at different binary options brokers under the names: High or Low, Up or Down.
You choose a Call option when you believe that the asset price will rise over a period of time. In order for a call option to be successful, the asset price must rise above the price that the asset was at, when you placed your bid. A put option is the exact opposite. You bet that the price will fall over time instead of rise.
If you haven’t traded options before, it’s important to know what the call or put actually is: a call is a contract in which one party agrees in the future to sell their ownership stake in an asset at a certain price to another party. If the price of the asset increases, the second party - the buyer of the contract – profits, because he can buy the asset at a price which is better than the market price. A put is a similar type of contract. The difference is that the buyer of the contract profits if the price of the asset falls.
Touch or No Touch
With this type of options, you bet whether the price of an asset will reach, or “touch,” a specific price point. If the price touches your target point, the trade closes immediately and you receive your expected return. Otherwise, the trade remains open until it expires at a loss (“out of the money”).
If you choose a No Touch trade, and the price of the asset touches the barrier, the trade closes immediately at a loss.
Double Touch or Double No Touch
This type of binary options is similar to Touch or No Touch, however there are two price barriers, high and low price. For you to win, price has to touch one point or the other.
For a Double No Touch, you will win if the price does not reach any of the price points, but just remains between the points until the option expires.
Also known as In or Out, Tunnel Options and Range Options. You bet on the price staying inside a range of prices, between the highest and lowest prices of the range. Conversely, you can bet on the price staying out of a range of prices, at the time the option expires.
This type of options present a higher risk of loss, but also offer a higher return. It’s not uncommon for potential returns on boundary options to climb to 300% and above.
Where can I trade these options?
Not all brokers offer different types of options. Many still offer just the standard Call/Put options.
We have found the following regulated brokers to offer Touch, Boundary and other types of options:
|Name||Logo||Bonus||Min Deposit||Payout (%)||Review|
|Banc De Binary||$10,000||$250||85%||Review|