IQ Option offers the possibility of exiting the position ahead of time. If you see the market is not going in the favourable direction and you are definitely not going to win, you can close the option before its expiry. This will let you lose less than the whole invested amount. Binary options are sometimes called high-low options. You have to decide will the price of the asset go up or down. The moment you open a position indicates the strike price which is equal to the current asset price.

You will see two colourful buttons on the IQ Option platform. You choose the expiration time the moment you enter the trade. It can be as short as 1 minute or as long as 1 month. The payout is fixed and is evaluated as the percentage of the amount you have invested in the trade. It varies for different assets and is dependent on the volatility of the market.

Also, expiration time influences the payout rate. The main rule is the same that is you have to speculate on the direction of the price in the future. But the payout is not fixed. It depends on the extent to which the price changes in relation to the strike price.

The payout will be bigger when you choose strike price far away from the current market price. IQ Option offers fixed expiration times for fixed time trades and they are 1 minute, 5 minutes and 15 minutes. The strike price is the price of the underlying asset at the moment you buy or sell an option. In both, binary and fixed time trades trading your task is to decide whether the price will reach a higher or lower level than the strike price when the transaction ends.

The expiration times are fixed in binary and fixed time trades as well. When the preset expiration time is completed, the transaction will be closed automatically. In both cases, you will see the red vertical line which marks the expiration time. With IQ Option you can trade binary and fixed time trades for currency pairs.

Binary options are also available for other asset classes such as commodities and equities. You have to make an assumption about the future price direction. However, in binary options trading, this is all that matters, will the price will go up or down from the current market price, while in fixed time trades trading there is an additional factor. And, this factor is how far the strike price is set.

The expiration times for binary and fixed time trades are different. You can choose the expiration time from 1 minute to 1 month for binary options and for fixed time trades you have three possibilities to choose from: 1 minute, 5 minutes or 15 minutes. Then, we have the return. On the other hand, a digital option has no real asset, and returns are based on how far the price assets drives from the strike price.

On the other hand, traditional options trades are settled through the Chicago Board Options Exchange. The most basic of these is the plain vanilla option. You will win or lose when you buy a digital or a binary option. They are both relatively similar, but they each have different characteristics.

If you are a new or beginner, you should choose a second or second expiry time, as these will allow you to evaluate the price movement and trade volume. You will be deciding whether the value of an asset will increase or decrease and whether the trade is worth the risk.

Trading in binary options is completely different from trading in traditional stock or commodity markets. With traditional investments, you buy and sell stocks, while with binary options, you are betting on the movement of an asset. Since these options are highly volatile, you can bet on the value of the asset, which may not be profitable.

Because of this, you will have to be very knowledgeable about the market to make an informed decision. When trading digital, investors can choose between two different types. One type, known as tunnel options, has a lower strike price and another, called double-no-touch options, has an upper strike price and a lower strike price.

These options tend to have shorter expiry times, but these may vary depending on the platform, broker, and asset. However, they both offer investors a high degree of flexibility. One-touch options are also popular, as they payout if the asset touches the strike price before the expiration. Target options have two strike prices and are sometimes referred to as dual digital options.

These options are great for traders who think volatility will be high. One difference between binary and digital is the fixed expiry date. In a binary option, the value of the trade will either be high or low at the time of expiry. Traders who want to limit losses can buy and sell binary options before expiry.

In binary options, the price of an asset determines whether the contract matures in the money or out of the money. The asset can be a stock, currency pair, commodity, or index.

The investor speculates on the value of the asset at the expiry date, which can be as quick as fifteen seconds or as prolonged as a month. Traders can double their investment in a single hour when using a sound binary options strategy.

There are numerous advantages and disadvantages of binary and digital options. It is easy to learn how to trade and profit, attracting people who would not normally consider trading for investment.

Home Category IQ Option Binary VS Digital Options: which type is more profitable? Page Contents. Binary VS Digital Options. Expiration Time for Binary Options. Expiration Time for Digital Options. Binary VS Digital Options — open a new asset.

Binary VS Digital Options binary menu. Binary VS Digital Options — expiration time. Binary VS Digital Options- investment amount. Binary VS Digital Options — up or down. Binary VS Digital Options — outcome.

Binary VS Digital Options- digital choose asset. Binary VS Digital Options — digital choose profitability. Binary VS Digital Options — indicators. Binary VS Digital Options — sell before expire. Binary VS Digital Options — last. About The Author. Gabriel Wagner Gabriel Wagner is a Financial and Economic Analyst who works with the BO Blog. During that time, he has written over analytical articles on technical and fundamental analysis, financial company valuations on this, and other sites and forums like investing.

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IQ Option Binary vs Digital Options, which is better? Today we compare the performance and characteristics of option instruments on the IQ Option platform. Find out how binary and digital options differ. IQ Option is one of the few online brokers that has managed to attract millions of traders from across the globe over a short amount of time. The main reason for this is their innovation and introduction of new features and instruments.

One of their latest introduction is digital options trading. This guide will look at both binary options and digital options. These are financial instruments offered by IQ Option. An Option is part of the derivatives types of assets. This means that their value is intrinsically tied to the value of an underlying asset.

When you buy or sell an option , you do not own the underlying asset. You're typically speculating on whether the asset's price will go up or fall over a specified period. Upon trade expiry, you will either earn a profit or incur a loss.

The profit is usually calculated as a percentage of your trade investment. The total amount you could lose is your trade investment amount.

However, some brokers such as IQ Option will allow you to exit the position before the option expires. Also popularly known as a high-low option, binary options trading involves speculating whether the price of an asset will rise or fall over a given amount of time.

Your trade entry marks the strike price. If you anticipate that the option will expire when the price is higher than this, all you need to do is enter a higher position. The trade expiry is always predetermined. On the IQ Option platform , this ranges from 1 minute to 1 month. IQ Option binary trades always have a fixed return which is calculated as a percentage of the trade investment. The return you receive depends on the asset being traded and market volatility. The digital option combines the power of the binary option and the increase in the price of the underlying asset.

So rather than have a fixed return, the return for a digital option is calculated based on how far away the price moves from the strike price. The further away from the price moves, the higher the return. The trade expiry for the digital option is 1 minute, 5 minutes and 15 minutes on the IQ Option platform. Both option types have a predetermined expiry. Once the expiry period is reached, the position is automatically closed. The trade expiry for both is indicated by a vertical red line on your chart.

Both option types require you predict whether the price will be higher or lower than the strike price on trade expiry. IQ Option offers binary option and digital option for currency pairs and commodities. In terms of the number of assets available in the binary vs digital options battle, the former offers about 2 times as many assets available for trading.

Binary options trading is dependent on the direction of the price relative to the strike price. That is, whether the price will be higher or lower than the strike price at trade expiry.

Digital options trading on the other hand is dependent on both the direction and the price distance from the strike price. That is whether the price will be higher or lower as well as how far away the price will be at trade expiry. The return for binary options trading is fixed and predetermined at trade entry. The return for digital options trading on the other hand fluctuates as long as the trade remains open. With binary options trading, the maximum amount you can lose is your trade investment.

With digital option trading, your losses can be higher than your trade investment. The further away the prices move from your prediction, the higher your percentage loss. Binary Options have expiry periods ranging from 1 minute to 1 month. The digital option on the other hand has trade expiry periods lasting 1 minute, 5 minutes or 15 minutes. Binary vs Digital options do not have that many significant differences. Often the strategy used will determine which instrument you use.

A simple example: If your method involves opening an option for an hour, digital options are out of the question because their longest expiry time is 15 minutes. Once you've logged into your trading account, click on the select assets feature plus sign at the top of your trading interface. Next, select options then binary. Choose the asset pair you want to trade with. Use a Japanese candle chart with 5-minute interval candles. After analyzing the chart, enter the amount you want to trade.

Next, enter the trade expiry. While using 5-minute candles, the minimum expiry should be 5 minutes. You can learn more about trading candles in The Ultimate Guide for Trading Candles on IQ Option. Once you've logged into your IQ Option account , click on the select assets feature. Click on options and then select digital. Next, choose the assets you want to trade with. Set up a Japanese candle chart with 5-minute interval candles. At the right of your chart, you'll see sets of boxes with prices in them.

If you hover your cursor over these boxes, you'll notice that the higher and lower buttons have possible percentage profits you can earn. Once you've analyzed the chart and determined the direction the price will take, follow these steps:.

As you've seen, binary options and digital options have similarities and differences. Digital options have a higher risk-return compared to binary options. Now that you've learned about both, try them out in your IQ Option practice account today. We'd love it if you share your experience in the comments section below. General Risk Warning: The financial products offered by the company carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose.

Average rating 4. Vote count: No votes so far! Be the first to rate this post. Fulltime Day trading, and help Iq option wiki in my spare time to build an awesome platform to help beginners out there. digital-nomad, traveling all over the world. นอกเหนือจากนี้แล้วโบรกเกอร์ iqoption ยังถือเป็นโบรกเกอร์ที่ได้รับความนิยมและเป็นโบรกเกอร์ด้านไบนารี่ออฟชั่นอันดับต้นๆด้วย ซึ่งทำให้คุณสามารถไว้วางใจได้ถึงคุณภาพของโบรกเกอร์ และความสำคัญของโบรกเกอร์แห่งนี้ ผมเชื่อมั่นว่าหากใครจะเริ่มต้นเทรดก็ควรเทรดที่ iqoption ครับ.

A very well articulated article. It has just opened my new window into options trading as a begginer. Skip to content Share on Facebook Tweet Share on Twitter Share on Linkedin Pin it Share on Pinterest.

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All options trades, be it binary or traditional must expire at some point after which settlement takes place. The premium amount increases with time and volatility. The beginning is the same. Thus, in Binary Trading, there are no possibilities of trading, also because in this, you are trading against the broker, which precisely means betting against the broker. For investment, you can go for different types of hype products, for example, spread betting, bitcoins, and more. Another area of similarity is in the underlying assets that can be traded in both markets. At IQ Option , one can trade two types of options: binary and digital.

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