Range Binary Option

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There are many different approaches that you can take with trading binary options, the most simple trades are known as “call options” and “put options”. As a trader starts to get more knowledgeable and more experienced on financial markets, they begin to seek out more advanced ways of growing their capital.

Range options (also referred to as boundary options) are one of these more advanced tools that many knowledgeable and experienced traders will implement into their trading strategy. Throughout the next few sections we’ll tell you what a range option is, how they can be beneficial, and more.

What Is a Range Option?

A range option is a type of option that is quite similar to a touch option; the main difference is that you’re not actually predicting a set price that the asset might reach, you’re instead predicting a range that the price might fall within.

So for example, with a touch you might predict that the price of GBP/USD will reach 1.5800. With a range option you have more flexibility and could predict that the price of GBP/USD will settle within the range of 1.5780 to 1.5820.

These options can be very beneficial in certain market conditions, but in others they should be kept well clear of; we’ll talk about this more in the next section.

How Can Range Options Be Beneficial?

Touch options can be beneficial in certain market conditions, and range options are also beneficial in the same way. Range options can be beneficial to your portfolio if you know how to utilize them properly, but they can be very damaging if you don’t.

Range options give you more flexibility, but they also restrict you to make a prediction that can sometimes be within a tight range. Other options, such as a standard call option or put option, give you a much easier choice.

Range options are most beneficial when they are executed when the market is “ranging”, meaning that it’s not in an uptrend or downtrend, so price is staying fairly consistent. This will give you a much better chance of making a successful range option trade.

Range Options for Advanced Trader

As you grow and develop as a trader, you’ll naturally want to take advantage of some more advanced trading techniques. If you’re still a new trader, try to stay away from range options for now, it’s best to just focus on standard call options and put options.

Range options can be very beneficial to advanced traders with more knowledge and experience, as we have discussed above, so they are definitely worth considering if you have been trading binary options for a while.