One of the most appreciated things regarding trading a binary option is that the fixed return that is offered is well known in advance. It should be noted though that after buying a binary option it cannot be resold before the expiry time is reached. This is important and makes the decision to buy a binary option an important one, as once into the trade, basically you are just locked in and wait for the option to expire.
Binary options can be applied virtually on any underlying security that “moves”, basically on any financial product: starting from currencies and ending with commodities, one trader can buy an option in both directions: buy a call/up option or buy a put/down option, virtually going long or short the respective financial product.
Typically binary options are offered against a fixed expiry, starting from the 60 seconds (one minute) option and up, but they can also be in various types, like the touch/no touch option, also known with the name if one touch option.
A one touch option allows a trader that thinks that the price will reach a specified level during a certain time horizon to book the potential profit if that specific price level has hit during the specified time horizon. If that is the case, the trader would immediately receive the potential payout he agreed upon in the first place.