Binary and digital options are only advertised and offered to professional traders. If you are not a professional trader, you can not trade binary and digital options. But you can trade forex and cryptocurrencies.

Comparison of option types (1) – HighLow options

types of binary optionsThere are many types of binary options: Touch options and No-touch options, which are offered for example by broker TopOption, Classic medium-term high-low options which are offered by all brokers, KIKO options from the broker Stockpair, 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 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: Banc de Binary, Stockpair and TopOption. What does such trade look like can be seen in the picture below.

classic binary options

This is how a CALL highlow option works

Spread binary options

The broker ETX Binary offers highlow options with a small modification and calls them spread binary options.

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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 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.

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 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 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.
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Author

Step

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

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