3 Types of Binary Options
The most important aspect when talking about payouts is the kind of binary option traded.
The ‘high/low’ option is considered the simplest type. Predicting if an asset price would be above or below the strike price before expiry time and pays the lowest return. This averages between 70%-90% depending on your broker.
Then again, there are more solid types of options like the ‘touch and range’ binary options, which offer higher payouts because winning such trades likes to be harder. From what we have got, brokers typically give payouts around 200%-450% and some can even offer as high as 750%!
A High/Low option also known by a few different names: Up/Down, Above/Below, and Over/Under. It is the most common and simplest type of binary option.
Traders basically go for a ‘call’ option if they think that the market will close above the strike price at the time of expiration, or go for a ‘put’ option if they believe that closing price will be below the strike price when the contract expires.
One Touch option trades don’t necessitate the price to be above or below of the strike rate at expiration. Alternatively, it just needs to TOUCH the strike price for once during the option contract period for it to be profitable.
No-Touch trades, then again, require that the asset price DOES NOT TOUCH the strike price at the time of contract period for a trader to make profits.
Touch trades are available during certain times of the day, moreover some brokers offer touch trades throughout weekends that typically offer higher payouts (around 250%-400%) than a simple High/Low option trade.
Trading Range/Boundary options are look like playing the Super Mario underwater level in where Mario cannot touch both the top and the bottom of the screen.
In Range trades, the asset price must continue within a fixed range and avoid touching the two strike prices within the expirations time in order for your trade to be profitable.
Many brokers offer Out-of-Range options where traders can make profits if price breaks out of the fixed range within the expirations time.
Range options are finest used when market volatility is low, however, some brokers offer the option to take risk on the idea that market price will BREAK out of the fixed range. On the other hand, some brokers also offer options on fixed ranges that are far from the current market price.