High/Low options are the most common type of Binary options that are used by traders. While buying these options, traders have to speculate whether the price of their asset will be higher or lower at the expiry time than what the asset is worth at the specific moment when they are making the purchase.
As an example, if you are buying the trade now, you have to predict whether the value of your asset will go higher or lower than what it is worth now. If you predict higher and the value ends lower, you will stand to lose money. Alternately, if you speculate lower and the asset worth climbs higher you will again lose money or at least a major chunk of it. Your trade will be successful only when your prediction comes true.
What makes High/Low options so popular?
High/low options are very simple to understand and hence, they are used by maximum number of traders. They can also be applied to all types of market conditions. Even in sideways or trending markets, these can be used. The price does not need to be only in a single direction for the trade to be successful.
High payout rates
These options, although simple to understand and trade, involve higher levels of risk. However, this disadvantage is offset by the promise of higher payoffs. With more or less successful predictions, traders can expect to get returns as high as 85% . The simplicity and profitability associated with high/low binary options have made them dear to traders across the globe. It is the most traded product for the majority of Binary options brokers.
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