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Range Binary Options

Binary options trading is a form of investment that involves predicting whether the price of an underlying asset will move up or down. Trading binary options can be profitable and actually good fun, but is also rather risky. For those of you new to the world of binary options, one thing you may find a little confusing is the variety of different types available. This is why we’ve decided to dedicate a few pages to explaining the difference; because choosing the right binary option type is just as important as picking the right binary options broker.

So let’s start with our guide to range options.

What are range options?

Range options are preferred by many binary options traders, and involve speculating whether an asset will stay within a specified price range over a certain length of time. This type of option is known by a number of different names, including boundary and tunnel options. To be successful with range options, the price of an asset needs to stay between two given prices and never go higher or lower than the two limits set.

How range option trading works

range binary optionsRange option trading has become very popular among traders, especially those who are looking for high returns. However, not all binary options brokers offer this particular type of trade. The basic principle behind this type of options trade is really rather simple, but the strategy behind using it is a little more complex. Don’t worry, though, because we aim to cover both. But first, let’s look at the basics and explain how range options trading works.

The first thing to consider is the expiry date of the option. Second comes the range of prices, which is usually fixed by the broker. As with many other binary options trades there are only two final outcomes. You either end up in the money or out of the money – it’s as simple as that. If the price of an underlying asset ends up within the specified price range you are in the money. If it ends up outside of that range, then you will be out of the money; which effectively means you lose. There are, however, a number of brokers who offer out-of-range option, which means a profit is gained if the price breaks out of the pre-agreed range, within the time period of the option.

Let’s give you an example, so you can better understand how it all works.

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Recommended Binary Brokers

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Broker Min Deposit Regulation Bonus Read More Visit Site
XM $5 CySec $30 Free Read Review Visit Broker
AvaTrade $100 MiFID 40% Read Review Visit Broker
24option $250 CySEC N/A Read Review Visit Broker
HotForex $50 CySEC 100%* Read Review Visit Broker
HYCM $100 FCA UP TO $5000 Read Review Visit Broker
FBS $1 IFSC $123 Free Read Review Visit Broker
FIBO Group $300 CySec N/A Read Review Visit Broker
Instaforex $1 FFMS 250% Read Review Visit Broker
easyMarkets $200 CySEC 50% Read Review Visit Broker
XTB.com $250 FCA Up to 30% Rebate Read Review Visit Broker
UFX $50 CySEC, MiFID $50 Free Read Review Visit Broker
eToro $50 CySEC, FCA Up to $1000 Read Review Visit Broker
itrader $250 CySEC UP TO $30,000 per T&C Read Review Visit Broker
Plus500 $100 CySEC N/A Read Review Visit Broker
CM Trading $250 FSP Up to $3,000 Read Review Visit Broker
Trade.com $250 CySEC $25 No Deposit Read Review Visit Broker
* Not valid for EU traders, T&C apply

An example of range options trading

It’s always easier to understand a concept if there is an example. So here’s one to help you on your way:

Imagine you want to make a play on Apple’s stock, which is trading at $500 (purely an example, and in no way an accurate reflection of the real market price). The company quarterly returns are about to be announced, and you have an inkling they will fall in within analysts’ forecasts. Which means you believe the stock’s price may go up and down a little, but will be relatively unchanged. Say your binary options broker is offering a range option with a price range of between $510 and $515. We’ve already determined you believe Apple’s stock price will have very little upward movement, so you may well decide to execute your option outside the range.

Tips on how to trade range options successfully

If you think that range options are for you, then keep reading, because we’re about to share some important tips. After all, you must be interested in any advice on how to become more successful, surely.

Along with the information we’ve shared tucked away in your bank of binary options trading knowledge, we’d like to add just a couple more snippets of advice: It’s important to stay focused, and use what you’ve learned sensibly, by tailoring it to your own game. Having an understanding of this will help you to be more successful, and give you the experience to use range options as one of the ways you choose to trade binary options.

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