Binary options have become an increasingly popular financial instrument in the recent years.
As risky as they are, more people than ever before are choosing to try their luck and skills at making money with this financial instrument.
There are a lot of different kinds of binary options that one can choose from before buying.
While the exact types vary depending on the way they are interpreted, here are the most common classifications of binary options.
1.) Classification based on countries
There are two classifications based on countries:
a.) National Options – These are the binary options that are traded within the country.
b.) International Options – These are the binary options that are traded across national borders.
For example, The United States Securities and Exchange Commission look at binary options in terms of those which are traded inside the United States and which are traded outside of it. Those that get traded outside of the United States are called ‘Exotic Options’.
2.) Digital Options
Digital Options are by far the most popular of all the different types of binary options.
They are also called as ‘up/down options’ since their trade involves the investor having to only decide whether the set price will rise or fall below the trading price in a set period of time.
The time period of these investments can be as little as 15 minutes or as long as an entire day. In other words, they are financial instruments that have a very short lifespan
3.) Touch Options
Touch Options are of three types; Touch, No Touch and Double Touch.
- Touch – Investors who bet on Touch binary options are betting on the value of a certain option, regarding whether or not it will rise up to or above a certain price.
- No Touch – Investors who go for No Touch binary options are betting that the value of a certain investment will fall to a certain specific price.
- Double Touch – Investors who go for Double Touch options will place two different bets on two different positions. In other words, two different estimates are made and he wins if either of these positions is reached in the set period of time.
4.) Binary META
Binary META is a trading method that is a lot more complex than other binary trading options that are frequently used.
This is probably one of the best ways in which an investor can go in for Binary Options. The advantage of this is that the investor will not only be able to bet on the future value of an investment, but will also be able to change the value along the way. Then again, should he feel that the pricing is likely to cause him a loss; he has the option to sell it off beforehand.
5.) Sixty Second Binary Options
They are essentially similar to Digital Options.
What makes them different from Digital Options is that the investor who goes for these options is betting on the probability that the price of a particular stock will rise or fall within a sixty-second period of time interval.
6.) Boundary Options
Boundary Options are those options wherein the investor places a bet that the price will stay within a particular price range for a set period of time.
The investor wins money if the options stay within the set price range in the predetermined time period.
There is an alternative of this kind of options. In it, the investor places a bet if the price moves outside the predetermined boundary within the predetermined time period.
As a whole, there are numerous different types of binary options that are available to investors.
The one used for investing will depend entirely on one’s skill, ability to take losses as well as financial standing.