Profiting From Two-Way Movements

Profiting From Two-Way Movements

Submitted by adil on Fri, 02/07/2014 - 14:44

Binary option trading is different from other trading options in many different ways. The most wonderful thing about binary options is that it enables traders to benefit from asset movements in a way that is simply not possible in other markets. The boundary trade contract also known as the in/out trade on some platforms is the typical example of this ability of binary options trading. The same strategy is also known as tunnel options or range options on some other platforms. However, the principle of this trade contract is the same on all platforms regardless of the nomenclature.

In boundary trade contract, traders try to take profit from the assets who remain within a certain price range as well as from those who breakout from this range. In this regard, the Boten markets offer traders an interesting opportunity to trade various varieties of boundary trade contracts. Some of these varieties are given as under.

• Ends Between:

In “Ends Between” type of boundary trade contract, the trader will earn the profit if the asset price ends lower than the upper boundary price but higher than the lower boundary price. In simple words, the asset price has to stop in between the higher and lower price limits that form the consolidated price range.

• Goes Outside:

As the name suggests, the trader will earn profit in “Goes Outside” subcategory if the price breaks out any of the lower or upper price limits. In this case, it is not necessary for the price to satisfy the conditions set for true breakout. A particular trade will be declared as a winner if the asset price just touches any of the upper or lower price boundaries. This is totally in contrast with the Forex market in which the price has to actually break out of the range for the asset to be declared as winner. 

• Stays Between

The “Stays Between” is somewhat similar to the “Ends Between.”  In this case, the trader will earn the payout if asset price stays below the upper price limit and higher than lower price limit without actually touching either of the limits. In simple words, the asset price must not touch the upper and lower boundaries and has to stay within the range till the time trade expires. Only then, the trade will be considered as a winner.

• Ends Outside

If the price breaks out either of the lower or upper price boundaries that are “Ends Outside” from the consolidated range, the trader will still be able to take profits from this type of boundary trade contract.

Now the question is how a trader benefits from two way movement in binary options in case the price is constantly moving up or down. In this case, the best option is to choose the Goes Outside trade as it will help trader not to worry about the rising or falling asset prices. The trader just has to ensure that the price touches either of the limits at least once during the trade lifecycle.

A Forex or commodity trader must guess the trade direction correctly. Obviously, only one direction can be correct at any given time and therefore, the trader has to go either long or short to increase his chances of success. However, trade will definitely end up in loss if the trader fails to guess correctly. On the other hand, the Goes Outside trade in binary options will help traders to take profits regardless of the trade direction.