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Home > Option Types

Option Types

As you are aware, there are several different ways that you can place binary options trades. Although the most well-known one is the Call/Put option, traders also like to engage in other techniques to make more of a profit. With a great deal of variety of choices to select from, which option types should you choose? Fortunately, the answer to this question is not all that difficult. However, it will require to evaluate certain aspects of your trading plan. Ask yourself the following questions and you should be better equipped to decide which option you should try:

Which One is Best Suited to Your Strategy?

Now, some strategies simply require that you follow certain option types. In most instances, however, strategies often offer you a great deal of leeway. As a result, you can opt for anyone of the types available to you.

Nonetheless, it will be worth it to you to examine your strategy more closely. It is quite possible that you will find that one option will be more advantageous to you over another. If there is no clear winner, then you can turn to the next questions that you must ask yourself.

How Much Risk Are You Willing to Incur?

Yes, binary options trading carries an inevitable risk – you either stand to make a profit or lose all of your money. However, there is some variation between the trading options in terms of risk. Some ventures are a little more risky than others. Let’s take the Call/Put option as an example. Here, there is a relatively low amount of risk. This is because it is simply a matter of determining whether or not the value of a particular asset will be rising or falling.

The only disadvantage here is there is a limitation to how much of a profit you can make. The One Touch and No Touch trade option, however, give you the opportunity to make a higher profit. At the same time, you will also have to take on more risk. This is because you will also have to determine just how much the value will rise or fall by. This required precision means that there is a lower chance of you getting it right. Therefore, you are going to need to make a decision regarding profit vs. risk.

How Well Can You Withstand a Losing Streak?

A continuation of the risk factor is determining just how much you can stand to lose. Many traders forget to take their emotions and mental resilience into consideration when thinking about their option type. Imagine, for instance, that you decided to choose One Touch. The risk of this type of option means that you will most probably be losing more than you win. Nonetheless, there is the propensity to make a higher profit. What you may not take into account, however, is the psychological blow of losing so much. It can be quite difficult to deal with let alone continue when you are on a losing streak.

Do Your Prefer Split Second Decisions or Thorough Analysis?

There are many types of trade options that can be conducted in a matter of seconds. There are others that can carry on for hours, days, or even months. The 60 second option is great for individuals who like to make quick decisions and want to see similarly fast results from their trades. If you are like to carefully evaluate all of the charts, information, and data that you have at your disposal, then the long term trades are more suited to your trading style.

Of all of the Options types which ones you should choose largely depends on the answers that you provided for the questions above. This will help you select the one that is the best possible fit for you.