Learn all types of Binary options
There are many types of binary options. For beginner its recommend to trade only classic binary options and Touch/Notouch but unfortunately SpotOption doesn’t offer Touch/Notouch options yet. Other types of binary options can help you to understand price movement more. But please don’t trade other types than Classic- and Touch/Notouch binary options only in a demo account.
Classic binary options
The classic binary options are the one you found most information about. Assuming the current price of EUR/USD is 1.10775 (you get for 1 Euro 1.10775 USD) and placing a CALL trade then you win if the price is at the experience date above 1.10775. If you place a PUT trade then you will win if the price is below 1.10775. If the price is at 1.10775 at experience date you will get your investment back. The entry price (in this example 1.10775) is called the strike rate. Between your strike rate and the experience date rate it doesn’t matter where the price moved. You will win the trade even if he jumps in the last second of the trade in the area of your choose. Most strategies and signals using this kind of binary options, hence it is important to understand trading them.
Touch/Notouch is another interesting binary option chooses. Unfortunately SpotOption doesn’t support them yet and the implementation differs at most platforms. It is the opposition of the classic options. While your trade at classic options says whether the price is higher or lower than the moment of the trade and doesn’t care where they move until the trade expire, Touch/Notouch option trades say only whether the price hit or hit not a threshold, no matter where the price is at experience date. The distance between the threshold and the actual price of the asset is variable and moves closer the shorter the trade takes.
Pair options compare the price change of two different Assets. The strike rate is calculated by the price of the first asset divided by the price of the second one. For example, if you trade Gold vs. Silver while the price of gold is 1300.0 and the price of silver is 20.0 the strike rate is 65.0. If the gold price increments to 1400, the strike rate rise to 70.0. If the silver price increment to 25.0 while the gold price keeps 1300.0, the strike rate fall to 52.0. Except this calculation of the strike rate the Pair option is similar to the classic binary option.
Long term options
Long term options are options over a longer time. Classic options experience date is mostly between 15 minutes and 4 hours while long term options goes about more than one day. The experience date of SpotOption is every week at Friday 17:10 UTC while you can choose one of the next 14 Fridays. Most traders can determine the price movement over a long time more accurate, but have to wait long until their trade is expired.
Short term options
Short term options or 60-second-options are like classic options, but have a relative experience date to your trade time. This option type ends after 60, 90, 120, 180 or 300 seconds, sometimes 30 too. Beware of scammers who try to bait you using short term options and Martingale Strategy! It’s hard for most traders to determine the price movement in such short time frames. The minimal investment sum of short terms is at most broker platforms lower than classic options but the average yield is lower too. If you want trade short term options learn about Support and Resistance. That is much better than place random trades at Martingale.
One touch options
Don’t mistake the One touch with the Touch/Notouch options. It is like a long term touch option. The long period of the option cause in a very big distance between strike and target rate but in a big refund too. This kind of option is not recommended for any newbie because it’s very hard to predict.