Regular high / low options, which require you to predict whether the market will rise or fall over a given period of time, face a simple limitation: If you anticipate a strong movement, you can’t turn this prediction in a higher payout than if the market only barely ends up on the right side of the option.
That is why binary options brokers invented one touch options, which feature far away target prices, and which the market only has to touch once in order for you to win your option. While one touch options solve one problem, they generate two new problems:
1) What if you anticipate a movement that is right between what regular high / low options and one topuch options? So far, you were left without an option in this case.
2) What if you anticipate a strong movement that not only touches the one touch options target price, but remains at this price level? Should you not be able to get a higher payout for this more accurate prediction?
With the CherryTrade ladder options, they has solved both of these problems. Ladder options allow you to invest in high / low options based on a price level other than the current price level. You can choose from five different price levels, from close to the current market price to far away from it. By choosing a far away price level, you will get a higher payout.
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If the EUR/USD is trading at $1.1346, for example, a regular high / low option would use this price as the measurement for a winning or losing trade. A touch option might require the price to rise to touch $1.135. With ladder options, you could invest in a high / low option based on these prices:
These five options allow your trading to become more precise and thereby more successful. If you choose a far away price as the basis of your ladder option, you can get a payout of up to 1,500% – three times what one touch options can get you. If you are sure that the market will rise signficantly, why would you let this difference of 1,000% get away from you?
Similarly, you can invest in a ladder option based on a nearby price level and increase your payout from a maximum of 81% (what you would get for a regular high / low option) to at least 120%. If you choose a further away price level, you can easily get a higher payout, such as 450% or more.
Alternatively, you can use ladder options to predict that the market will stay inside a certain price level. Then, you will make a more secure prediction than with regular high / low options, which will result in a lower payout, but also win you more trades. In some market environments, especially when volatility is low, this might be the best way to make money.