Because binary options are so simple in nature, there are no many types of options to be offered by brokers. In this introductory part we tried to show you the types of binary options available out there, like the one touch option and the sixty seconds option, beside the regular calls and puts.
In order to address the need for diversification a trader has, each respectable broker offers a so called option builder tool, and the purpose of this tool is to let traders to customize their settings for building the option that they think will have the most chances to be in the money at the expiration date. After all, this is the goal when trading binary options, right?
So what the trader should do is the following:
- first he/she should choose the asset: commodities, currencies, indices, stocks, etc.;
- second, he/she can set the time of expiration: hour and the minute the option will expire;
- the builder tool will identify the potential payout;
- choose the investment amount and everything is set.
This tool is mainly used by traders trying to combine the regular trading on the spot markets and when specific patterns are identified and time is taking into consideration (for example, in the case of contracting triangles, when the e waves come to an end). The possibility of building your own binary option is appealing for those reason listed above and this could function as a hedging strategy as well for the overall investments one has.