An inbound option, which is part of the boundary instrument in binary options trading, allows traders to speculate on whether an asset will expire within an upper and lower limit set by the broker. This tool requires traders to anticipate the asset’s movement relative to these boundaries, offering a strategic approach to binary options trading.
Inbound option in a nutshell
- Inbound options in binary trading speculate on asset expiration within broker-set limits.
- Traders analyze market trends to anticipate asset movement within preset boundaries.
- Successful predictions within boundaries yield wins; otherwise, traders lose their investment.
How does an Inbound Option work?
An inbound option is used for trading binary options within a given time. Only after analyzing the market trends and seeing the minimum and maximum price boundary of an asset should you make a decision.
Once you have correctly understood the market, you can predict whether the expiry value will be within the decided level or not. If your predictions are accurate, you will win. However, if the asset expires outside “outbound”, you will lose your money.
Example: How to trade an Inbound Option?
To understand how to trade an inbound option, let’s consider a trade scenario on Pocket Option, focusing on the EUR/USD currency pair, currently priced at 1.06129.
Assume you decide to invest $100 in an inbound option with a 5-minute expiry time and a payout rate of 92%. The broker has set the maximum and minimum price range for this asset at 1.06050 and 1.06200., respectively.
For this trade to be successful and result in an “In The Money” outcome, the value of the EUR/USD pair must expire within the specified price range. If it does, you win the trade, and your option is considered successful.
Why are Inbound Options popular among traders?
An inbound option is a component of boundary trading that is getting popular among traders lately because it is easy to understand and simple to execute. To make your inbound option successful, you can understand the basic market trend of the particular asset you are trading in.
Read other important articles in the binary glossary.
