Binary options can be defined as an exotic option to deal with finances. In this, the payoff can be a fixed amount of money or absolutely nothing.So, basically these binary options work on the basis of yes or no propositions. For an example, the traders will bet on an asset which is expected to be above a certain amount at a particular time interval. Now, the client will buy the binary option if he thinks that the price will be above but if he thinks that it will be below the price then he will sell the option.
There are a lot of platforms which provide the binary option trade. One of them is the Brit Method. If you go through the Brit Method review, then you will get to know how people are making so much of money through these trades.
Types Of Binary Options
- One of the types of binary options is known as high-low option which is also termed as fixed return option because of having an expiry time and date.With the help of fixed return option, one can access commodities, stocks, foreign exchange, and indices.If a business owner follows the market’s direction properly and then wagers correctly, then he will get a fixed return paid. But, if he wagers incorrectly then he will lose the entire amount he invested.
- In case, the market rises, then the trader will purchase a call else he will buy a put if the market is believed to be falling. If at the expiry time, the price is higher than the strike price, the trader who bought a call will make money. And if the price is less than the strike price then the trader who bought a put will make money.
- Other than high-low binary option, there are many other types of binaries that are used by the traders. In case of one touch binary options, the trader makes money if the price just touches the certain amount before expiry. Traders can choose any target whether it is below the current price or above it, whichever they think will hit before the expiry.
- In case of range binary option, the trader is allowed to choose a price range within which the asset will be trading before the expiry. The trader will receive a payout if the price is within the range selected but if it is out of the price range then he will lose all his investments.