Three Ways to Trade Binary Options

To each his own - binary options show versatility.

Topics Addressed

  • About Binary Options
  • How Versatile are Binary Options?
  • Option Builder
  • One Touch

Traders around the world are in consensus that binary trading online is a revolutionary experience. Its pioneering qualities are breaking barriers for investors within each avenue of the financial arena. Minimal risk, online accessibility, varying assets, and zero commission fees are just a few reasons why binary options trading is capturing the attention of both new and experienced traders alike.

Trading is designed to be straightforward and simple so that all traders can benefit from binary options. There are three steps to each trade:

Choose the underlying asset.

Click on "Call" to determine if the asset price will rise by the expiry time, or "Put" to determine that the price will fall.

Choose a specified investment amount.

Advantages of Binary Options

Trading binary options is not only simple and profitable for its traders; it also offers many advantages that increase the odds of being "in the money".

  • Controlled Risk: The reward amount is known at the time of investment which allows the trader to determine the amount of potential loss.
  • Hedging: This option allows traders to open a trade in a different category so that to increase risk aversion.
  • Flexibility: Due to the reason that binary contracts are constantly issued at all times of the day, traders are able to trade on their schedule.
  • Simplicity: It only takes three steps for a trader to be "in the money" and it is only by one single pip (price point).

How Versatile are Binary Options?

Binary options can be traded in varying forms which allows its traders to choose a preference that it most suitable.

Option Builder

Each trader has their own individual style of trading; option builder allows for the trader to customize each trade. This new method is increasing in popularity across trading platforms and is geared towards more experienced traders. For traders that have a working knowledge of the market, the option builder feature allows traders to set the exact expiry time and risk level of the asset in which they are investing giving creating a greater sense of control and risk management for the investor.

Option Builder Benefits

  • Customize trade
  • Set exact expiry time and risk level
  • Increases investor control

One Touch

The one touch feature for binary options is trending amongst traders, especially those of the forex market. This feature allows traders to earn profits by determining whether or not an underlying asset will exceed a certain price within a specified amount of time. The one touch feature gives binary option traders additional security in the transaction. This feature is available to traders on the weekends when markets are closed and payouts are elevated.

The one touch feature offers investors the highest payouts available. Payouts of this feature reach up to 500 percent on each investment. Traders will earn profits on their investment if the underlying asset in the transaction reaches or falls to the target price. If this happens, just once within the expiry time, the trader will be considered to be "in the money".

Benefits of One Touch

  • Returns ranging from 150%-500%
  • Expiry times are limited to once a day or week at either 17:00 GMT or 19:30 GMT on Fridays
  • Sold at fixed price
  • Trades are considered "all or nothing"; if the trade expires "in the money", the full return percentage is paid out, if the trade expires "out of the money", the value of the trade is lost
  • Unlimited amount of one touch options can be traded

One Touch Option Example

  • Asset: Gold
  • Spot Rate: $230
  • One Touch Rate: $260
  • In the money payout: 500%
  • Unit price: $200
  • Units purchased: 3

According to this example, if gold reaches $260 or above by 17:00 GMT on Monday, Tuesday, Wednesday, Thursday, or Friday, the asset will expire "in the money". The trader would then receive a payout return of 500% or, in this case, $3,000. If the asset does not reach $260 within the expiry time, the asset will be considered to be "out of the money" and the trader would lose the amount invested which in this case is $600.

See also

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