Exotic binary options: Range and Boundary Options (Inside / Outside)

Range-/Boundary-Optionen Range or boundary options are very exotic binary options. Therefore, not all brokers offer this alternative. The brokers who offer trading limit options offer this to the appropriate risk variants. The risk variant of the range options with a maximum payout of 300% over a very lucrative form of digital options. Range options are generally characterized by a higher chance of winning.

This is due to the tougher trading conditions. For the traders of trade means a boundary option at an increased risk. He must here predict not only the price development properly. In addition, it is a requirement that the exercise date of the Boundary option provides a defined limit be not exceeded. The market value of this may be above or below the starting price. Besides the correct forecast of a rise or a fall in the trader must also decide if the closing price is within or outside the defined limit.

Here, the Inside and Outside are differentiated options. Whether Inside or Outside option is traded, is primarily dependent on the clarity of the expected market development.

Inside Options

In the Inside option must predict the trader if the price of the underlying moves up or down. At the same time, he has to specify that the expiration date established in the Underlying (“inside”) will be of pre-defined limits. If the time of exercise both conditions are met, the Inside option is exercised successfully. Trade with an Inside option is advisable if the trader expects minor market movements. In a very moving market and foreseeable significant price changes, it is very difficult to act in an inside option successfully.

Outside Options

In the outside-option, the share price at the exercise date must move out (“outside”) the previously defined boundaries, of course. This Binary option is the right choice when the trader expects a very significant price change. Outside an option is exercised successfully, when the price moves in the direction predicted by the trader up or down.

It is also necessary to move outside the specified boundary points and there are the expiration date yet. If these two conditions are met, the outside-option is in the money. Successful trade with these exotic binary options is possible when being faced with very strong and very significant price changes and market fluctuations.