Binary options (also known as digital or fixed-yield options) are a type of fixed-odds financial instruction that provides the option to bet on the potential movement of an asset. Market assets that are often traded include commodities (oil and gold), stocks, and indices. The ability to trade fixed return options has seen a significant rise in popularity in recent years because it is a low-risk, low-cost system to trade.

By operating in the markets with fixed quotas, the risk exposed to the investor in a single operation is minimized. This is clearly different from trading with leverage, such as spread betting or Forex, which has a much higher risk. For the complete novice in the financial market, binary options is the preferred and safest place to start.

The type of binary bets can vary with the different platforms offered by the brokers. Investors have the option to use a trading style that matches their preferred trading technique and payment system. Having a basic understanding of the different binary bets will surely facilitate successful trading in the markets.

Here are four of the different types of binary bets on the market:

Tall short

High-Low is the preferred trading option for most binary investors. The trading method offers the option to bet on the final price of an underlying asset. A trade must end within a certain price above or below the original figures.

One touch

The payout method for the one-touch trading method is achieved if an underlying asset reaches a predicted price at any time during the day’s trading.

Tidy

The range option is based on the investor predicting a high and low limit for a proposed trade. A payout is achieved if the underlying asset can stay within these price points during the trading session. This type of trading is related to being able to predict market volatility.

Goal

The target option payout is related to the market price reaching a specific amount announced by the investor. A price target can be set high for those who believe the market will be bearish or it can be set much higher on more bullish trading activity.

Binary options payout potential may differ with different platform options and percentage amounts. A winning option typically receives a payout in the region of 75 to 85 percent.