After you have understood how the Binary Options work, let’s go to analyse the features of the Binary Options. What are the features present in each Binary Option, regardless of the type of option? This answer is quite simple:
– The Asset: that is the underlying activity of the Binary Option, on which we make our forecast; the choice is varied, because you can choose among Stocks, Indices, Commodities or Currency pairs.
– The Payout: is the gain that we have from the Binary Options if our prediction was correct; this earning depends on the type of Binary Option that we have chosen, on the Asset of the Binary Option and on the Expiry Time. Normally It can varies from (at least) the 70% up to the 500% (Or more) of the money that you have invested on the Binary Option.
– Expiry Time: At the end of the Expiry Time we will know if our prediction is correct or wrong, and if we will have the Payout from the Binary Option on which we have invested or not. The length of the Expiry time can vary a lot: from short Periods as 1, 2, 5, 15, 30, 60 minutes up to long Periods as Hours, 1 or 2 days or weeks. The Expiry time of the Binary Options varies from Broker to Broker and from one type of Binary Option to another type.
– The type of Binary Option: the “standard” type of Binary Option asks us to make a prediction about the movement of the Prices: we have to predict if (From the current value of the Prices) the Prices will be higher or lower after a certain Period of time (The expiry time). But there are also other types of binary options, such as One Touch, Touch or No Touch, 60 Seconds, Range, and so on (They vary from Broker to Broker).
– The “Risk” factor: this is a feature not available for all types of Binary Options and it’s a feature that not all Brokers have. In practice, we are “free” to choose to balance the risk factor of the binary Option that we want to choose. In fact, once we have chosen the type, then the Asset and the expiry time, we can also choose (not always) the “risk” of that Binary Option, that will directly modify the PayOut of the Binary Option. We can set a percentage of Return on our investment, in case of a wrong forecast; for example, if we had invested 100 euro on a Binary Option, but at the end of the expiry time it is Out of The Money (Not paying) instead of In the Money (Paying), so our prediction is wrong, we will get a part of the initial investment of 100 euro back (usually you can choose a percentage of 10%, 15% or 20%, but it varies from Broker to Broker). However, remember that the highest the value of the Return is, the lowest is the Payout of the Binary Option.
These are the features that each Binary Option has: it’s up to us, to choose these features every times that we want to invest on a Binary Option(Except the PayOut that is fixed by the Broker).