As we have often mentioned in our articles, there are several different types of binary options; each Broker has its own offer, that varies from Broker to Broker. This means that some Brokers will offer you some types of binary options, while others do not. For this reason, knowing all the types of Binary Options is very important, so that you will be able to decide at which Broker you want to register.
We will analyse the various types of binary options available; in this article we are going to analyse the “Boundary Binary Options or Range Binary Options”.
Boundary Binary Options or Range Binary Options
With the Boundary Binary Option you have to predict if the Prices will remain inside a fixed “Range” of Prices or not after the Expiry Time (“Range” that is fixed by the Broker: there is a value that is higher than the current value of Prices and there is a value that is lower than the current value of Prices); firstly you have to choose an asset (Stocks, Commodities, Indices, Forex), then you have to predict if the Price of the chosen asset will remain inside the fixed “Range” (Fixed by the Broker) during the Expiry Time (That you can choose from the ones available or it can be already fixed by the Broker).
If you think that the Price will remain inside this fixed Range, you can invest the amount of money that you want on the “Inside the range” (Also called “In”) Binary Option. Remember, the Price has to remain inside the fixed range during the Expiry Time and never go out from the range (If the Prices go out from the range, also for just one time, you will lose the money invested); in case that the Prices remain inside the fixed range (And never go out) you will earn the Payout (That is already fixed and that you know from the beginning) whereas if your prediction was wrong, you will lose the money invested (Or a part of them).
If you think that the Prices will be out the fixed range after the Expiry Time, you have to invest on a “Outside the Range” (Also called “Out”) Binary Option and if the Prices will be outside the fixed range after the Expiry Time you will earn the Payout (That is already fixed and that you know from the beginning); whereas if the Prices remain inside the fixed range after the Expiry Time, you will lose the money invested (Or a part of them).
Here an example:
Let’s say that the actual price for a share of Amazon is $70,50; the Broker has fixed the range for the Prices: $72 and $69. We believe that the Prices will be outside of this Range, so we invest on the Outside the range Binary Option. After the Expiry time, in fact the Prices are outside the fixed range (For example the value is $72,50). So in this case, we will earn the Payout; while if the Prices had remained inside the fixed range, we would not have earned the Payout but we would have lost the money invested.