Comparison of option types (1) – HighLow options.
There are many types of binary options: Touch options and No-touch options , trade binary options Classic medium-term high-low options which are offered by all brokers, KIKO options and many others.
But which one of these options is the best deal?
Why should you choose a broker based on the offered option types and expiration times? In today’s article, you’ll learn what high low options are and in the next episode, we will look at Touch and No-Touch options.
Classic high-low binary options.
The concept of the classic options is surely notoriously known. Simply predict whether the price of the asset (currencies, a commodity or a stock) at a certain time rises or falls and trade binary options a reward in the form of a profit of about 180% of the amount with which we traded is awaiting us. These options can be traded with the vast majority of brokers. Best brokers who allow trade in conventional high-low options include: IQ Option, Olymp Trade and Expert Option. What does such trade look like can be seen in the picture below.
This is how a CALL highlow option works.
Spread binary options.
The broker High Lows offers highlow options with a small modification and calls them spread binary options . Unfortunately, they only accept Australian Traders now.
The strike price is moved (what is a strike price?) a little in our disadvantage. This means that the price has to do a bit more movement than the minimum to get to the earnings. The advantage is that the broker pays a higher income of 100%. Do you understand how a spread option and trade binary options classic option differ from one another? For better understanding, check out the picture below and compare it with the picture above.
This is how Spread binary options work. Notice the higher earnings and offset strike price.
I think that with high low binary options there is not much to explain. It is really the simplest type of trading. In the next part of this miniseries, we look at touch and trade binary options no touch options.
Advantages of classic options:
It’s sufficient for the price movement to be minimal and sometimes even one-hundred-thousandth (0.00001) We have clearly defined how much we will earn or trade binary options lose These options are offered by most brokers If options do not play out nicely, they can be extended using the rollover function sometimes Sometimes, we can „sell out" from the position, so we do not get into loss We can use hedging.
Disadvantages of classic options:
We are bound by the expiration time. Lower appreciation compared to other types of options.
Author.
More about the author Step.
I've wanted to build a business of some kind and earn money since I was in middle school. I wasn't very successful though until my senior year in highschool, when I finally started to think about doing online business. Nowadays I profitably trade binary options full-time and thus gladly share my experiences with you. More posts by this author.