Range binary options is a type of binary trade similar to One Touch options. Range binary options can also go by the name Boundary or Tunnel options.
Like other exotic types of binary trades, Range options typically come with significantly higher payouts compared to traditional High/Low options. This is one of the main reasons why new binary option traders are drawn to this form of trading.
Similar to One Touch options, Range option trades come with a predetermined boundary made up of two separate levels. These two levels are the range. The width of the range is determined by the broker and the asset being traded. Before executing a range trade, the asset’s current price will move with the boundary levels and stay in the middle.
Traders must determine whether or not they believe the price of the underlying asset will stay within its given range when the trade expires. But, traders get the option to choose between In Range, or In Bounds, or Out of Range, Out of Bounds, for their trading contract.
If the market is slow and traders think price will remain within the range, they might select In Range. If an asset has momentum or is about to receive an impacting news report, they may select Out of Range.
The expiry times for this type of trade can range anywhere from 5 minutes to an entire trading period.
Range trading is simple, so it’s attractive to most new traders. But consistently profiting from Range trading is a little more complex, but at the same time, it’s a little easier compared to One Touch options for most investors.
Traders can easily lose their money if they’re not careful. Here are a few common mistakes made by beginners trading Range options:
Price can move in and out of a given range if it’s allowed by the broker. Some brokers mandate that if an In Range trade is placed and price moves out of the range, even for just a moment, the trade is dead and the trader loses their investment. Try not to use brokers who have this rule installed. It is very possible for price to go out of the range and re-enter just in time for the trade’s expiry.
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