Binary options traders are absorb a certain degree of risks when they trade binary options. This basically occurs when binary traders place binary bids, actually invest the money in a contract and then predicts whether the contract’s value will increase or decrease at the time of its expiry.
If the binary predictions come true, then the binary traders might make a huge profit, usually in the range of 70-80%. On the other side, if the contract’s value does not perform as expected then the binary options investor doesn’t not make any money.
There are three typical ways in which binary options trading is executed. Each kind carries its advantages and disadvantages.
1. High-Low Binary Options:
In such a trade, binary traders’main goal is to predict the variation in the price of a given contract precisely. During such a trade, binary option investors need to to correctly guess whether the given contract’s current price will decrease or increase after it expires. In case prediction turns out to be true, binary treaders will get a pre-determined profit percentage on your investment.
2. Touch-No Touch Binary Options:
Another method to trade binary options trade is to pick whether the value of a given commodity will touch a certain amount or not. In touch-no-touch, simply a binary investor needs to choose whether the commodity’s price will be touching the predicted amount or not.
The price of the underlying asset does not have to be touching the quoted amount at the time of expiry as even if it touches the given amount once before its expiry.
3. Range Binary Options
Another type of binary options trading is analyzing whether the given contract’s value will decreased within a certain range or not at the time of its expiry. In such a trade, the main goal is to predict whether the value of the given contract or stock will fall at the time of expiration.