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 the trader correctly calls the movement of the asset, he or she will be awarded with a fixed amount of return. Otherwise, he or she receives nothing at all. This is why it is termed as binary options trading, because there are only two only two possible conclusions to this situation. Binary options trading may also be referred to asa all-or-nothing options, Fixed Return Options (FROs), and digital options.
Binary options trading has different for which are utilized in various markets and trading platforms. Cash-or-nothing binary options trading is one type of them. This is possibly the most frequently utilized model in binary options trading wherein the trader procures a contract for either Call or Put. A correct bid will earn a fixed return, usually between 170% and 200% of the stake. If the investor made the wrong prediction, he or she loses the stake, but sometimes, the remaining 10% to 15% is given again.
Another type of binary options trading is called the assets-or-nothing binary options. This type of binary options trading is very similar to the cash-or-nothing binary options. However, the amount of return is not decided by the stake but rather by the amount of the underlying asset itself.
Meanwhile, there is also what is called the one-touch binary options trading. In this type of binary options trading, the contract ends once the assets price touches a predetermined value, hence its name. The investor has to bid whether the asset value will reach that amount during the length of the contract. There is also a no-touch binary option which is the exact opposite of the said type of binary options trading.
Last but not the least, there are the double-one-touch and double-no-touch binary options trading. These types of binary options trading follow the same concept of the 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 main binary options trading models that are used today. Even though a lot of people think that this kind of option is more of a gamble, this kinds of investments actually let you compute the risks that you are taking, which can help you make an informed decision.