Over the last few years binary options have become increasingly popular because of the long list of advantages to trading binary options over standard options or other types of trading.
Binary Options, which are considered “all or nothing options”, offer investors the opportunity to speculate on the bearing of a financial instrument. Binary options trading offer an excellent risk reward ratio with fixed risk and fixed returns. Because the payout is known in advance, this generates an easily customizable money management strategies. Call / Put binary options trading, also known as Above / Below options, OR High / Low Options can expire either ITM – In the Money – Or OTM – Out of the Money. [More binary options terms are listed in the Glossary] When markets are volatile these options can be extremely beneficial, hence the popularization of these types of trades over the last 4 years.
The types of binary options include High / Low, One Touch, and Boundary. All of these trade types are “binary” meaning they can only have 1 of 2 possible outcomes, ITM or OTM.
Binary options as a whole now provide individual investors the prospect of hedging and fencing, directional exposure in pretty much any given market place. If you like to trade Commodities, Stocks, or even Forex pairs – you’ll find what you’re looking for and are guaranteed to find the benefits limitless! Make sure to apply correct money management strategies as you would, stay true to your own trading style, and select a quality broker.