Choose Your Binary Options Trading Model

Binary options trading is a form of option which consists of traders that call on whether the value of a particular asset will increase or decrease in a set amount of time. If a trader places the right bid on the movement of the asset, he or she will acquire a fixed amount of return. Otherwise, he or she receives nothing at all. This is the reason why it is called binary options trading, as there are only two possible outcomes in this situation. Binary options trading may also be referred to as all-or-nothing options, Fixed Return Options (FROs), and digital options.

Binary options trading has different forms which are utilized in various markets and trading platforms. The cash-or-nothing is one type. This is perhaps the most popular form wherein the investor buys a contract for either a Call or a Put. A correct bid will earn a fixed return, usually between 170% and 200% of the stake. If the trader made the wrong call, he or she loses their stake, although at times, 10% to 15% is returned.

One more type of binary options trading is known as the “assets-or-nothing binary options”. This type of options trading is very similar to the cash-or-nothing binary options. However, the value of the return is not based on the stake but rather by the worth of the underlying asset.

Meanwhile, there is also what is called the one-touch binary options trading. In this type of trading, the contract ends once the asset’s price “touches” a predetermined value, hence its name. The investor needs to call whether the asset price will reach that value during the duration of the contract. The converse of this kind of binary options trading is the “no-touch binary option”.

Finally, there are the double-one-touch and double-no-touch binary options trading. These forms of options trading are very similar to the model of one-touch and no-touch binary options trading. However, the double-one-touch and double-no-touch binary trading makes use of two values instead of one.

These are the different types of binary options trading that are employed today. While many people consider this type of option as a gamble, this types of investments actually allow you to calculate the risks involved, allowing you to make an informed decision.