Understanding Three Different Types of Binary Options Trades
Are you looking to get into the fast paced world of binary options investing? In the last few years, the popularity of binary options investing has surged as investors have come to realize the benefits and big payouts that binary options offer.
For many first time binary options investors, it can be tough to figure out what the different kinds of binary options investments are and which ones are right for the first time. Fortunately, understanding the different kinds of binary options bets is actually easier than you may think. Check out below for descriptions of the different types of binary options bets, and click here for binaryoptions.net to learn more about binary options.
A one touch bet is a very popular type of binary option bet, and it’s often a starting point for people interested in binary option trading. The trader buys the option, and if the option “touches” the set price once before the option expires, the investment is paid out.
One touch binary options are very popular because they’re simple. You must determine the price barrier you want to set so you can reach the one touch, as the further you set the barrier away from the purchase price the better the payout will be. But if you set it too far, hitting the price even once might not happen. One touch investments are great because it doesn’t matter which direction the touch could go, as you could invest on either a high touch or a low touch. That makes it a great investment no matter what kind of market the economy is in.
Ladder is a newer type of binary options bet that is quickly gaining in popularity. A ladder trade is where a trader is given a range of different prices that are set at different equal intervals, like a ladder. A ladder trade specifies that a certain market must rise past a certain level after a certain period of time for the investment to pay off.
A ladder trade requires several price levels to bet set, and several time periods to be set as well. For the trade to pay off, the market must essentially “climb the ladder” through the given period of time. For beginners, a ladder trade can be somewhat difficult to grasp. Once you’ve been successful at other, more simple types of binary options trades than you can move on to ladder investments.
The high/low binary option trade is another trade that’s popular with newer investors, as the idea behind it is relatively easy to grasp. Basically, a trader purchases a call option if he or she is confident that the price will expire above a certain set price, or the trader purchases a put option if he or she believes that the price will finish below that set price upon expiration.
While the concept of a high/low trade is easy to grasp for beginners, it requires a lot of research as some brokers require a long length of time before the trade expires.