The binary options have two possible outcomes whether the trader earns a high profit or earns nothing at all. Binary options are easier to understand and simpler to use. New traders entering the stock market regard the binary options as the best experience to start with the market. The most common binary options are the high-low binary options. These binary options provide an access to the assets such as indices, stocks, foreign exchange and commodities. The high-low option in the binary market is also called as the fixed return option.
Fixed Return Option
The fixed return options mean that these options have certain expiry periods. The expiry period may be a certain day or certain time during the 24-hours of a day. It is mainly in the hands of traders where and how much the traders invest. If a trader invests correctly according to the tendency of the market. And in addition to it has a high price of a certain commodity at the expiry time may win or gain a higher profit margin. In contrast to the merchants that have a little bit of know-how about the market are unable to invest at the right time, and they may lose the amount they have invested in their binary options.
There are two basic rules for a binary options market the ‘call’ and the ‘put’. A call option is for the traders who believe that the market price will rise in the future and buy a certain commodity, they term it as a Call. And if a trader believes that the prices and rates will fall below a certain level and they purchase the options, this is termed as Put. The strike price is another feature of the high-low binary options market.
The strike price is the price of commodities, indices, or stocks at the time when the expiry period has just ended. This price determines the profit gained or loss suffered by a trader in the market. Therefore, the forecast near the expiry time is the most important.
The high point is the point that provide the investors a right but not necessarily the option to purchase a commodity at a high price. These are usually called as the Call options. The Call options are used by the investors who are long going in the market. And seek for more profits than other investors and traders. These options are utilized by the traders and investors who are generally considered as the bulls of the markets. Bull means a trader who purchases the stock at a higher price and sells it a lower price and when the price is lowest he/she buys it again.
The Low point is the point that provide the investors a right but not necessarily the option to purchase a commodity at a low price. These are usually called as the Put options. The Put options are used by the investors who seek for a short term stay in the market and want to earn a profit in the shorter period. These options are used by the traders who are considered as the bears of markets. Bears are the traders who buy the commodities at a low price and then seek the opportunity to sell the stock again when the prices are high thus earning a profit margin quickly.