When binary options trading first became available on global markets in 2008, the possibility to achieve high profits in a relatively short time span was what attracted traders to this form of online trading.
However, there is more to trading binaries and flexibility is certainly at the top of the list of advantages over some other forms of trading.
A cursory inspection of any binary broker platform will show an abundance of different types of binary options which can be used in the trading process and obtain healthy profits.
While it is not possible to find all the different type of binary options or trade options with just one broker, the selection is truly fantastic and allows for the various trading approach.
To provide South African traders information on different types of binary options, how each functions and what could be the possible benefits of each.
Selection of Different Types of Binary Options
So, what might South African traders expect when it comes to different types of binary options once they open a trading account with their preferred binary broker?
As we already pointed, it is not possible to find all the trade options we will present in our article with only one broker but in most cases, there will be three to four different types of binary options available.
Some binary brokers have introduced some trade options which are not so wide spread such as Kiko Options with StockPair or Bubble and Dynamics with AnyOption but these are the exception rather than a rule.
At any rate, we strongly advise that all South African traders intending to trade binaries take the time to learn about these different types of binary options.
In doing so, they will build a solid knowledge base when it comes to picking up a trade option they wish to use.
This option is one of the most popular in binary options trading and which can be found on the majority of trading platforms.
The High/Low option is also one which most traders opt to use at the beginning of their binary options trading journey.
This type of binary options upholds the guiding principle of binary options in general since it is focused on making a prediction about the movement of the underlying asset price.
With High/Low binary option South Africans simply opt for the Call (up) or Put (down) prognosis about the direction of price.
60 Seconds Option
60 Seconds is common sight among different types of binary options. This is a very popular option since, as the name points, it only lasts one minute.
The benefit of using this option is the fact that traders get to amass profit in a very short span of time if their prediction about the direction of the underlying asset price is correct.
They can also make numerous trades consecutively but without the prolonged waiting period to see if their trade was successful or not.
On the other hand, as exciting and potentially profitable this option might be, traders should also know the level of risk involved.
With trade options which have short expiry times like 60 Seconds the risk is much higher, but so is the potential monetary gain.
This is another very popular and frequently selected types of binary options. The core of Pairs Options is the relative performance of two different underlying assets.
Basically, traders who opt to use this type of binary option in trading make an educated guess as to which underlying asset in the pair shall perform better in comparison to the other.
This is actually seen as a market-neutral strategy in binary trading which approximates a long position to a short position in a pair of correlated instruments such as two indices, currencies, stocks or commodities.
For traders who opt to use Ladder Options in trading, this option deals with three different expiry times and three different prices.
So, traders have to select both the expiry times and prices which are then ordered to mimic ladders.
The aim is for the underlying asset to climb the “ladder” and strike set prices in the allotted expiry times. If that happens trader had a successful trade and will make a profit.
Among different types of binary options, traders can also frequently find the one called Range Options or Boundary Options (terms are used interchangeably).
This option is slightly more complicated so it may not be suitable for South African traders who are new to binary options trading.
Traders are required to predict if the underlying asset price shall stay within the set range in the predetermined period of time.
Traders deal with three values: the current market value, the price higher than the current market value and a price lower than the current market value.
If the price stays within the range of two opposite prices the trade will end “in the money”. If the price goes out of the range, traders lose their investment.
Long Term Options
Different types of binary options also include Long Term options as well.
This trade option is the complete opposite to 60 Seconds.
This options also has a much lower risk level though the profits are also lower.
However, traders who prefer more control over their trades will prefer Long term as it is easier, due to information at hand, to predict what will happen to the underlying asset price.
The downside is that traders have to wait for a longer period of time to find if their trade has been profitable or not.
One Touch Options
Last among different types of binary options commonly found on the trading platform is the One Touch Options.
With One Touch South Africans achieve profits if the underlying asset price “touches” or goes over the set barrier.
Traders get to set the level and the expiry time during with the underlying asset price shout touch the set level or go over it.
Regardless of which different types of binary options traders select to use in the trading process, understanding how the options functions is essential.
It would be prudent to start with simpler types of binary options and then slowly working up to using some of the more complex ones.
After all, not all types of binary options will suit all traders and finding the ones which most agree with the style of trading the individual trader has is essential.