Home Brokers Guides Demo
OptionMaxx Header
  You are here: Home Trading Guides for Binary Options Range Options in Binary trading

  Range options (boundary options)
  Range Option represent another, however more complex, standard of trading types in binary options. Details follow on this page.

Binary range options and boundary options that are traded as inside or outside options are regarded as exotic options not offered by every broker. Here the trader speculates that the rate of the base value will end within a certain range (inside option), or will leave this range and not return so that at the end of the option’s term it remains outside the range (binary outside option).

Pfeil grün Trading range options

The defining characteristic of range or boundary options is the fixed range within which the rate should, or should not, end up. In this context brokers offer different risk variants that depend essentially on the range itself. After all this can be determined by the broker as more or less wide. Corresponding to the trader’s high risk, high returns are also awarded which can at times exceed 400 percent of commitment. However the trading conditions are complicated, because to just only determine a range is not particularly easy, even more difficult is to predict if it will be exceeded during the course of a predetermined time period, and third, if the rate may possibly return to this range. For all these possible variants range options provide different corresponding winning chances. This is the opposite of touch and one touch options where the criterion is the touching of price limits.

Pfeil grün Types of binary range options

Two kinds of binary range options are on offer which in their respective variants model typical market developments:

Binary range inside option (in-option):
The rate starts out inside a range and ends up within the very same range. The range – so to say the area between an upper and a lower price limit – can be exceeded but at the option’s term end the rate must remain within the range. This does occur frequently and usually tests the traders’ nerves quite severely. In case of ranges being exceeded traders commonly hope to have found a developing trend that they can follow. If the rate stays within the range, too frequent trading often leads to losses. By contrast with the binary in-option profits can be made just in tis case.

Binary outside option (out-option):
Here one speculates that after purchasing the option the rate will leave the range and at the option’s expiration time will remain outside this range. In which direction the range is exceeded – up or down – is irrelevant. This case too is difficult to anticipate, but does occur with high volatility time and again.

Inside options are traded if low volatility is anticipated, outside options in the reverse case. Range options represent a bet on volatility simultaneously on reaching a new price bracket (out options), or on remaining within a price bracket. The outside option is probably the most difficult to trade.

We hope you enjoyed this guide. If so, we like to ask you for a "Like" or a "+1"

 
Broker Return  
anyoption Logo
85%
Jetzt testen
Banc de Swiss Logo 85%
Jetzt testen
Optionbit 85% Jetzt testen
TraderXP 85%
Jetzt testen

Binary Option Basics
Basics for Beginners
Pfeil orange 10 tips for success with binary options
Important Trading Options in Binary Trading
Pfeil orange Trading Call / Put options
Pfeil orange Trading Touch Options
Pfeil orange Trading One Touch Options
Pfeil orange Trading Range Options
Pfeil orange Trading 60 Second Options
Pfeil orange Introduction into Pair Trading
© Copyright 2012-2017 by OptionMaxx.com. All Rights Reserved.
        NL