The article explains variety of contracts of binary options. Since upcoming Giant.Exchange will be ensured by Giant Contracts all of them can be available for Giant.Exchange users. We highly recommend you to know all of them and increase your chances.
Definition
Binary options are, in simple terms, bets on the future market behavior. A user chooses a contract from the list of the available on the platform and invests a certain sum — then either gets rewards for correct predictions or nothing at all. In some cases, the consolation rewards are made by the platform creators.Binary options contract creators — brokers — make these offers by examining the underlying asset/currency/index and set time frames and values in such a way that the contract looks attractive for the end user. Currencies are the usual basis for binary options, assets can also underlie them. On some platforms, brokers are simultaneously platform owners and creators. On the upcoming Giant.Exchange, brokers will be independent from the original development team.Binary options are beneficial for those who have a trading experience and funds the loss of which will not lead to catastrophic events. You can check out your trading experience by using various virtual stock trading applications or simply by watching the market, writing down predictions and then checking how good they turn out to be. Always remember about the risky nature of binary options — the market may behave completely opposite to what you anticipate. Invest the money you are ready to lose.
Classification
There is a wide range of binary options types, let’s find out about the most popular of them and then see the exotic variations. All binary options have an underlying currency or asset, although some are dedicated to market indexes. Please note that not all of the types of binary options described below will necessarily be present on Giant.Exchange at first.Two most known binary options are Call (High) options and Put (Low) options. When you are making a Call option, you are betting on the growth of the underlying asset value, while Put options are made when you are expecting the value to lose ground. In both cases, the time frame is specified by the broker. For instance, a cryptocurrency looks like it’s about to go up because it’s going to be listed on a big exchange — this is exactly the moment to buy a Call option. Contrariwise, the best time for using Put options is when something bad is about to happen to an underlying asset.One-Touch and No-Touch options are used for a narrower range of purposes. A precise future value is specified in the contract, and in a set period of time, you can bet on the asset reaching the said value — this is a typical One-Touch option. In case you don’t think the asset price will reach a specified number and can bet on this — you are using a No-Touch option. As an example: a cryptocurrency called Giant Coin can reach $15 in the next 2 hours, says a newly listed One-Touch option. Traders who agree that this might happen invest money, and traders who are not are using another contract (No-Touch option) that states Giant Coin will not reach $15 in the next 2 hours.The next type of binary options is based on the price corridor. By the terms of contract, investors get rewards in case the underlying asset does not leave this corridor in a set period of time. Such binary options are called Boundary options and also known as Range options. For example, the cryptocurrency called Giant Coin might or might not leave the price corridor between $1 and $3 although sometimes fluctuating between these values. One can deduce that in this case, winners are those who bet on Boundary options with non-volatile underlying assets.We have just reviewed the most popular types of binary options, now we will focus on their less common modifications.There can be usual Call and Put options or even boundary options with a notable feature: the time period before their expiration is extremely small — 60 seconds or 30 seconds. Sometimes this is called turbo binary trading. And sometimes you can meet contracts lasting several weeks or even months — long-term options.The next type is a relatively recent addition to the market of binary options. The Ladder option offers several price levels the underlying asset may surpass. In other words, you can bet on the underlying asset reaching $1, $2 or $3 and the more it behaves according to you predictions, the more money you get. Ladder options can be Call options or Put options depending on the market situation and the status of the underlying asset. The ladder ‘steps’ are chosen by broker, as well as the time frame.In Pair options, instead of one underlying asset, two are used. In other aspects, these binary options closely resemble Call/Put or One-Touch/No-Touch options. Note that if, for example, Bitcoin and Ethereum are used together in a Pair option, this is not an option dedicated to the BTC/ETH exchange rate.But how to understand Double One-Touch and Double No-Touch options? They closely resemble usual One-Touch and No-Touch contracts with only one notable difference: instead of one value set by the broker, two are used. For example, you can bet on Bitcoin never reaching $30000 or $40000 — this would be a Double No-Touch option.All of the reviewed types of binary options are dedicated to the price behavior in the future. However, there can also be call and put options related to the behavior of a certain market index, for example, the overall capitalization of the cryptocurrency market. Judging by the overwhelming majority of the materials on the matter, index-based options are not as popular as other types yet. The structure of Giant has a potential to establish all types of binary options on the upcoming Giant.Exchange.
Summary
Binary options are usually divided into the following groups:
- Cash-based;
- Asset-based;
Most popular binary options:
- High option (Call option): betting on the price direction going upwards, time specified by brokers;
- Low option (Put option): betting on the price direction going downwards, time specified by brokers;
- One-Touch option: betting on the price touching a certain value, time specified by brokers;
- No-Touch option: betting on the price not touching a certain value, time specified by brokers;
- Boundary option / Range option: betting on the price not leaving a certain price corridor, time specified by brokers.
Subtypes of the most popular binary options:
- 60-second option: all of the aforementioned options with a 60-second expiry date. Warning: high risks for newcomers;
- 30-second option (turbo binary trading): like 60-second but even faster;
- Long-term option: days or even months before expiration;
- Ladder option: the user bets on the price getting to at least one of the offered levels. The more levels the asset/currency suprasses, the more money the user gets;
- Pair option: instead of using only one currency or asset like all the options above, in pair options you can bet on the price behavior of, say, Bitcoin and Ethereum (not the BTC/ETH exchange rate);
- Double One-Touch option: betting on two different variants of price an asset/cryptocurrency may hit in the future;
- Double No-Touch option: betting on two different variants of price an asset/cryptocurrency may or may not hit in the future.
Conclusion
While it is possible for common Web users to access binary options trading and get to understand their mechanism, there are obvious disadvantages. Brokers may not play fair at all times. On the centralized binary options platforms, there is no unhackable broker reputation system. This is where blockchain technologies come in, as at the time of writing, they are considered one of the most secure ways of data storage.While reading the text, you might have noticed that binary options are contracts that traders sign with brokers who create them. The system of Giant.Exchange smart contracts has been designed with most popular binary options in mind. The information on underlying assets which is usually provided by brokers will be supplied by independent users — oracles. By creating eponymous ‘Oracle’ smart contracts, they will ease the search of data for brokers and ensure that the main factor of traders’ success is their own expertise.With the amount of cryptocurrency exchanges and platforms, it is surprising how there has not been many binary options platforms connected with cryptocurrency yet. Giant.Exchange will offer both crypto and non-crypto binary options; oracles and brokers will be free to create completely new propositions.You can read more about brokers, traders and oracles in our separate material called Doing Business on Giant.Exchange and read the Giant.Exchange White Paper for more information. Stay tuned for updates and follow the news on our Discord channel.