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Call Options

A call option within the world of binary options is a prediction that indicates a belief that the price of an asset is bound to increase. With this type of trade, it doesn’t matter how much the increase happens to be—it can even be a fraction of a penny. If the price rises by even this small of an amount, the call option is considered to be successful and the payout will be received. This is the most basic of all types of option and is coupled with its opposite, the put option, on the vast majority of brokers’ online.

Choosing a call option is as easy as pushing a few buttons on your screen. Many platforms use the call/put option as their default setting, so you only need to choose the up direction next to the asset of your choice and decide how much you want to risk.

These can be executed across the widest range of timeframes. Some brokers have limited choices for the very short and very long term options, but call/put options are generally available for all assets and all timeframes. This is true even of 60 second and two minute options. For the longer options, call options are still one of the most popular types. You can find these present even in options up to one whole month long.

The downfall that you will find with call options, especially the shorter ones, is that their payouts are not as attractive as other types of trades. For example, a high yield boundary trade might return as much as 350 percent of your investment. These big return trades are notorious for being difficult to be right with, though, so even though a traditional call option might only return 75 percent, you will be right far more often. A few of these calls—when predicted correctly—will more than make up for the loss of profits because of the lower rates. Of course, it doesn’t make sense for brokers to offer high yield call options since the definition of a call option is that it has gone up, even if it is only slightly. Offering a much higher rate for this would be detrimental to the survival of a broker.

Another thing you may notice with the short term call options is that they do not return as much as the long term options. This happens for a very specific reason: when you go for a month long timeframe, your money is tied up for longer and thus cannot be instantly put back to use for you such as with a 60 second option.

If you are looking for a versatile type of trade that is easy to master, call options might be your best choice. These are the type of binary option that most closely resemble the traditional purchasing of stocks. With these, you are not taking ownership of anything, but like buying stock, you are hoping that the price you enter the trade at will be a low point and that the price will keep going up for as long as you are actively trading calls.

So whether you want to trade currency cross pairs at the 60 second level, or you want to trade U.S. stocks over the course of a month, you can use call options to help increase your profits. This is a simple, yet powerful type of trade. Even though it is the most basic trade you can conduct and is really easy to understand, it is very customizable, and this gives you a big advantage when it comes to making yourself some money.

Risk Disclaimer