There are two types of options contracts: vanilla options and binary options. Even though both categories of options contracts have some features in common, there are some individual features that set them apart. Some of these differences are why vanilla options are preferred over binary by some traders.
Binary options are quite limited in the opportunities available to traders to trade the markets. Vanilla options allow traders various trade types which may be used to trade various scenarios in the market. For instance, straddle and strangle strategies may be used to trade scenarios where price action is not moving at all and stuck in a range. There are even strategies for moderately bullish/bearish or heavily bullish/bearish market scenarios.[Read more]