Range is a type of binary option which allows traders to predict if an asset will expire within a predetermined range. This option is quickly becoming more popular with a lot of traders, especially those who are looking for high returns, and Option888 is one of the few online binary option brokers who offer this option.
Boundary Trading is fairly easy to understand, although the strategy behind it is incredibly complex. Range trading is literally just predicting where the price of the asset will end up in a given range that has been established by the broker. You’ll be able to see the highest price of the boundary, and the lowest price of the boundary, with the range displayed in a different colour to the rest of the chart. You will then see the price of the asset rise and fall according to the current market.
To be in-the-money, you must accurately predict whether the price of the chosen asset will expire in or out of a predetermined range. We’ll look at an example. If you buy an option of UDS/EUR, which is currently trading at 1.10. The predetermined range is between 1.00-1.30. After carrying out some research, you believe that the USD/EUR will expire at about 1.20, and decide to purchase the in-the-range-option. At the time of expiration, the USD/EUR is at 1.29, therefore not breaking out of the range, meaning that you are in-the-money. Just like other binary options, the trader will already know the return on their investment.
Trading with range options is recommended after you have had some practice trading in binary options prior to this, as traders can lose their money if they inexperienced. The normal ways that people lose their money though is if they do not understand the underlying asset properly, you have not done your research – both fundamental and technical, and if you misinterpret a trade’s timing and expiration date.