Binary options trading is quite simple but it is very important to understand the basic terms associated with binary options trading otherwise you would not be able to understand how to trade. “High” is one of the most common terminologies used in binary options trading.
High option basically denotes the price of an asset going up. The asset can be any of these: stocks, commodities, forex or indices. If you feel that the price level of an asset will be higher than the current price level at the end of the expiry time, you should select the high option and trade it.
After making a trade if your prediction turns out to be correct after the expiry period, you will make a predefined profit and it will be added to your account balance. However, if your prediction turns out to be incorrect, you will lose the amount you invested.
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High option is also traded in the vanilla option but there is a significant difference in the dynamics and outcome when it comes to trading high option in binary trading.
Suppose the price level of Apple is currently $100 and you invest $50 via vanilla trading. If after a certain expiry time the price level of Apple is $101, you will make a profit of 1% i.e. $0.5 in case of vanilla trading. On the other hand if you traded High option in binary options trading, your profit would be around 70% i.e. $35. The difference between the expiry price and the strike price (the price at which you bought the asset) does not matter in case of binary options trading.
All that matters is if the price level was higher or lower than the strike price after the end of the expiry period. In fact, in this example you would have made the same profit if the price of Apple was $110 or $150 at the end of the expiry period.
Trading high option is very simple and straight forward. First of all you need to log into your trading account with your binary options broker. After that select the mode of trading. It can be High or Low (also known as Up or Down) or 60 seconds.
After selecting your trading mode just select an asset which you think will rise in terms of its value. You can use the market updates, daily market reviews or binary options signals to make a better decision. Once you have selected the asset, enter the amount you want to trade. If you are trading High or Low option you will have to select the expiry period while in case of 60 seconds option the expiry period will be essentially one minute.
If your win you will make a certain percentage of the invested amount as a profit which will be known to you before you make the trade.