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Depending on the return offered for the contract, the trader makes an appropriate profit. The contract has an expiry time of 10 minute expiry.

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Let us take them one after the other. Expiry times can be as low as 5 minutes. How does it work? First, the trader sets two price targets to form a price range.

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Predicting if a currency pair would be above or below the strike price before it expires pays the lowest return. It is the simplest and most common type of binary option. Easy enough, eh?

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Binary Options Trading Risk Management Unifunds would like to point out that there are a number of differently structured binary options trades. While all the trades have the basic definition of binary in common, each differs from one another based on its elements. Firstly, there are two main types of binary options, which are the cash-or-nothing binary option and the asset-or-nothing binary option. The cash-or-nothing binary option either pays the trader a fixed amount of payout if the option expire in-the-money, or nothing at all.