Types

Generally, there is a misconception that there is only one type of options "all or nothing".It is an investment that will give you up to 65% to 81% profit or you will lose your investment. The reason behind this misunderstanding is that the word binary has been taken from mathematical system where it means 1 or 0 and another reason is that different types of  Them seem similar. There are hundreds of options available on trading platform. These options may have a commodity or currency rates or interest rate as an underlying asset. The binary option trading is becoming more popular and you may expect updated and new versions of options trading .We are going to discuss main types of options trading available in the market which are as follows.

Cash or nothing

It is the most common and frequently traded type on the binary options trading platforms. It is simple and easiest way of option trading and mostly amateur traders invest in this type of option.

Only you have to predict about the future of an underlying asset's price whether it will go up or down by a pre fixed time .If you think it will go up in the market you buy a call option contract and If you think it will go down in the market at expiry time you will buy a put option contract. If your prediction comes true it ends in the money and you will receive profit. If your prediction goes wrong it ends out of the money and you will lose your premium. Its profit or loss is predetermined by the buyer and seller and it is disclosed at expiration of the option.

Asset or nothing

 This type of binary option is operationally same as the cash or nothing binary option. These are less known than cash or nothing. The main point of difference is the determination of payout at the expiration. In cash or nothing binary option payout is prefixed and it has no link with market price of underlying asset at expiration. While in asset or nothing binary option payout is determined by the value of underlying asset at expiration.

One touch

In one touch binary option the price of underlying asset must touch strike price for one time during the life cycle of binary option. It expires in money if strike price is touched during this period. The binary option contract ends at that point. It means that investor will earn profit if strike price of underlying asset is reached in market from starting time to the expiry time.

No touch

In no touch options the price of underlying asset should not touch strike price during the life cycle of binary option. It expires in money if strike price is not touched during this period. It means that investor will earn profit if strike price of underlying asset is not reached in market from starting time to the expiry time.

Double one touch

This type of binary option is similar to one touch . The strike price in this type of options is between two prices .If underlying asset's price touches any level of price between these two points, it ends in money otherwise out of money.

Double no touch

This type of binary option is similar to no touch binary option. The strike price in this type  is between two prices .If underlying asset's price does no touch any level of price between these two points, it ends in money otherwise out of money.

These two types are also called “Range”.     

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