Digital Binary Options Contracts

binary options contractsWhen people refer to trading with Binary Options they often think this form of trading is restricted to higher and lower trading calls. However this is simply not the case.

The original binary options contract types do indeed follow this concept. They are found at all brokers and are known as the Call and Put option. They payout on the basis that you are able to forecast if the price of an asset will finish ‘higher’ or ‘lower’ than the price at which you purchase the contract. This is also know as the ‘entry price.’

As the industry has developed, an ever greater number of binary options contracts have been introduced by binary options brokers. Rather than a simple ‘up or down’ wager, these  now allow for a whole range of different price outcomes to be traded.

A range of contracts are now offered by most digital options brokers. These can be placed across all available trading assets that the broker offers. This allows for a number of trading strategies to be used and makes for a particularly broad trading experience which should satisfy a wide number of traders.

Here is a brief overview of each of the key contracts types offered at major brokers.

Call/Put

Otherwise known as the higher or lower option. This is the classic and ‘original binary. It is also sometimes referred to as a ‘vanilla’ option.

Trades set using this contract can be set to run over a number of time periods and pay-out if you can forecast whether the asset price will finish ‘higher’ or ‘lower’ than the entry price of the trade. Read more.

One Touch

This is the most common of the Touch trades although you will also find some brokers who also offer the similar No Touch trade. Here you specify a level in the market that you believe won’t be ‘touched (or will be) while the contract is running.

The pay-out on this wager is made provided as the level is not touched while the contract is live or immediately that the level is touched ( in the case of a ‘Touch’ contract). Read more.

Boundary

This is also sometimes referred to as the range contract. With this contract you set an upper and lower range that your analysis indicates that the market price won’t touch over the duration of the contract length.

This concept has been developed further with some digital binary brokers now allowing you to specify it you believe that the price of the asset will finish outside of the range at the point of expiry. This is essentially the reverse of the original Boundary contract. Read More.

60 Second Option

The sixty second option is not actually a different contract type but rather simply a Call/Put contract that is set to run for a very short time period. As the name suggests it is set to run for just 60 seconds in the market.

The sixty second trade was originally pioneered by TROptions, although is now offered by many binary options brokers. You can now trade contracts that are even more granular, in some cases lasting 30 seconds, 15 seconds or less! Read More.