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Different Types of Binary Options

There are many different types of binary options out there, and gaining a mastery over each type can be a great way to gain a foothold in this competitive marketplace. However, when you are first starting out, it pays to familiarize yourself with the most basic types of options: the call and the put. These are basically a prediction of whether the asset will go up in value (call) or down (put).

The great thing about the call/put combination is that you can trade every available timeframe for every asset that your broker offers. This ranges from the most common domestic stocks, to foreign indices, to a vast amount of currency cross pairs, to the world’s major commodities. All of these should be available upon the same broker platform that you are already using. This gives you the freedom to conveniently trade a number of different assets without having to change the site or the software that you are using.

It's Time to open an AccountOver the last several years, brokers have stepped up the amount of timeframes that are offered. As recently as two years ago, 60 second options were an exotic type of trade. Now, just about all of the major brokers offer this trade. Some brokers are now even offering two minute trades, too. And that’s not all. Some brokers are now trying to entice clients more interested in long term trades. Options that expire at the end at the conclusion of a trading day, week, or month are now starting to gain a foothold within the industry and this means more choices for the average trader. It gives traders a way to diversify their investments, too, and this can be a great tool for minimizing the amount of risk that you are assuming at any one time.

Once you master this trade, you can branch out and try the alternative approaches that many brokers offer their clients. The big downfall with these is that they are not as widely applicable as the call/put. But with boundary and one touch, you can fully customize your trading upon the offered choices. An approach that uses call/puts as the main trade, but uses a one touch trade in order to supplement your profits and hedge against potential losses can be a good way to protect yourself and make more money in a safer manner.

One other type of option that many brokers are moving toward is the high yield trade. Instead of a 70-80 percent return, these can offer up to 350 percent or even more. These are popular amongst one touch and boundary traders, but a degree of caution is advised here. For example, if you are looking to trade a 30 minute one touch trade on Apple’s stock and you want to use a high yield choice, the goal prices will be much further away than a typical one touch trade would be. This makes sense if you think about it. The broker would not survive for long if they were paying out 300 percent returns on a trade that was likely to happen. You will not be successful often with these trades, so unless you are able to spot a unique opportunity within a certain asset that is quickly moving in a certain direction, these should only be used very rarely.

The great thing about binary options is the wide array of diversity that these options can give a trader. You can trade almost any asset, at almost any timeframe that you can imagine, ranging from just a minute to a complete month. This is a powerful type of trading when used correctly and should be a tool that you consider using.

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