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Trading With Fixed Price Options

Trading With Fixed Price Options

The fixed price options are being used when trading the asset at a specified strike price within an expiry time allocated for that specific trade. Within that trading process, any of the call options can be used.

When we talk about binary options in general, we are talking about a placing a trade on a certain financial contract between a trader and a chosen broker, or between two traders. As any type of financial trading, binary options are generally considered to be risky which is always a probability with investments. There are no guarantees in trading, but with a combination of a sound strategy and an expert brokerage company, there are ways you can boost your profits potentially.

No-Touch Options

When it comes to the popularity of specific binary options types, No-Touch Options are undoubtedly at the top of that list. This options type is especially appealing to traders who are able to determine if an underlying asset price will go up over the range-bound. This is, obviously all done during a specific time frame. The longer the time frame the longer are the potential profits, but it does not guarantee that the risks associated with the trade won’t get higher as well.

No-Touch options also have a popular variety that the traders across the world really like – a Double No-Touch Option. This option variety offers a payout that is agreed on in advance, with a condition that the strike price goes beyond the double barrier level. That means that you as a trader will have to pay a premium to your broker which will grant you the possibility of choosing the expiry time, payout and barrier position. Keep in mind, like we already mentioned, there are never any guarantees when it comes to trading processes.

One Touch Options

These options enable the trader to win the trade if the asset price reaches a certain point. The important factor in this trading process is that the price touches either a resistance point or a support point, and naturally, within an allocated time frame.

Trading these options, traders are going to have to make great predictions regarding the asset price movement. If a trader’s prediction is correct, then the possible payout can be massive, depending on the initial investment.

This particular variety of touch options is a great choice for those traders that are good at predicting levels of fluctuation that the asset price might go over. The attractive characteristic is certainly the massive payouts that are possible if your assessment proves to be correct.

For this kind of trading, not unlike other binary options types, it is of the essence that you are well versed in market dynamics and have a great theoretical background. Ambitious traders will certainly revel in opportunities that this variety of binary options offers.

Range Options

Range options variety of binary options deals with trades that predict that the asset price will stay within the designated range between two strike prices. Another version is that the price lands beyond one of the two strike prices, all within the allocated time frame.

What is important for traders to understand when it comes to range options is that those are neither call or put options, but rather enables a specific payout if the price is consistent within a fixed boundary. Obviously, boundaries are normally set higher or lower that the strike price.

Another important characteristic of range options is that they seem to be very simple in construction which results in easier and more accurate estimation possibilities. Also, considering they are one of the few structured options, it’s helpful for traders who feel more confident in such a trading environment.

Rebate Options

When binary traders are in a situation where they are negotiating the price of a certain trade they will normally choose to use the Rebate options. This is also known as ‘’cash back’’ and is used to lower the purchasing price.

Rebate options are mostly used as incentives for new purchases that deal with specific trades. This functions as a motivator for traders to help them balance out their investment amounts.

Seeing that there are multiple brokers that offer this type of binary options you can get them in a fairly simple way. After you have made sure that the broker you want to register with is the right fit for you, all you need to do is to contact them and ask about Rebate options. Make sure you are aware that there are different deals available pertaining to Rebate options and you need to review them carefully to ensure it suits your needs.

In essence, Rebate options refer to a financial derivative that expires if the asset price reaches a designated price mark. When that happens, the trader is being refunded a portion of a paid premium. This option variety is considered to be exotic that can be realized only if the asset price actually reaches the designated limit.

Another feature of Rebate option is that it can be either a ‘knock-in’’ or a ‘’knock-out’’. The first type refers to a situation where the contract is activated once the price goes over or under the barrier price, depending on the set conditions. ‘’Knock-out’’ refers to a situation where the binding contract expires if the price goes over or under the boundary.

To round up this guide it is important to reiterate that trading binary options or any other type of financial trading require patience, knowledge and a great, expert broker. In addition, properly developed investment strategies and continuing education can indeed get you very far in this industry.

Besides the positives, traders need to be aware of the risks involved with trading and be adequately prepared to minimize those risks. Do not dive into binary trading without reading the broker and robot reviews and especially without a solid understanding of strategic investment planning.

The fixed price options are a relatively new occurrence in binary options trading and the same precautions stand for them as well as the other varieties. There are always ways you can boost your profit potential but you must not forget to review your possible loss occurrences and adjust your investment strategies accordingly.

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