Range binary options are a type of options where traders predict if an asset will expire within a predetermined range.
Based on tunnel trading, range options are currently only available on Option Banque.
In range options, to be in-the-money you must accurately predict whether a price of a specific asset will expire on or out of a predetermined range. For example, let’s say you decided to buy a range option of USD / EUR which is currently trading at 1.10. The option range is between 1.00 – 1.30. You believe that USD / EUR option will expire at about 1.20 and you decide to purchase the in-the-range option.
At the time of expiration, the USD / EUR was at 1.29 and did not break out of the range for the full hour. This means that you are in-the-money. Since all of the payouts are determined in binary option, the trader already knows that they will receive a 75 – 81% return on their investment.