As we have often mentioned in our articles, there are several different types of binary options; each Broker has its own offer, that varies from Broker to Broker. This means that some Brokers will offer you some types of binary options, while others do not. For this reason, knowing all the types of Binary Options is very important, so that you will be able to decide at which Broker you want to register.
We will analyse the various types of binary options available; in this article we are going to analyse the “High Low Binary Options or Up Down Binary Options”.
High Low Binary Options or Up Down Binary Options
This is the Binary Option by definition, being the first type of Binary Option to be available in the market. Surely you will find this type of Binary Option at every broker. With the High/Low Binary Option you have to make a prediction on the movement of the Prices; firstly you have to choose an asset (Stocks, Commodities, Indices, Forex).
Then you have to predict if the Price of the chosen asset will be higher or lower than the current Price after the Expiry Time (That you can choose from the ones available). If you think that the Price will be higher, you have to choose the Call Binary Option (Also called Up) whereas if you think that the Price will be lower, you have to choose the Put Binary Option (Also called Down). After the Expiry Time, you will know if the Price is higher or lower and so you will know if your prediction was correct or wrong; in case that your prediction was correct, you will earn the Payout (That is already fixed and that you know from the beginning) whereas if your prediction was wrong, you will lose the money invested (Or a part of them).
Here an example:
Let’s say that the actual Price of a share of Google is $95; for us, the Price will rise and for this reason we buy the Call Binary Option for this asset, choosing the Expiry Time of 15 minutes. If after the Expiry Time, the price will be higher than $95, for example the Price will be $96,50 or just $95,01, our prediction is correct and we will earn the Payout. Whereas, if the Price will be lower of $95, for example $93,40 or just $94,99, our prediction is wrong and we will lose the money invested (Or a part of them). Normally the value of the Price of an asset, is considered up to the Fifth or Fourth decimal: for example if the Price is $95,1290, also the smallest variation of the Prices (For example: $95,1291 or $95,1289) can lead our Binary Option In the Money (Paying) or Out of the Money (Not paying, so we will lose the money invested or a part of them).