Onion Binary Options definition


Binary options with an onion structure are nested double no-touch binary options. Onion binary options are designed for people who want to speculate on volatility; they have no directional features.

Their peculiarity is: for each Double No-Touch mentioned, onions have two strikes/barriers, three below and three above the current underlying price.

Many trading methods quickly switch to a lower payout and new strikes if the trading instrument trades at or through a strike or barrier at any time until expiration.

However, as with many binary options trading strategies, the trader can benefit from a lower payout if the underlying asset moves just a little away from the current price.

Since onions have negative options, unlike traditional straddles and strangles, if the trader expects a drop in volatility, he will buy the Onion rather than sell it.

Other properties of Onion binary options

Onion profiles rarely exceed a fair value of 3.20 with an implied volatility of 25%, showing once again that the Onion can offer an exceptionally high yield for trading the equivalent of a straddle in the traditional market. It would take a substantial initial binary spread to earn this kind of return by shorting traditional straddles or strangles.

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About the author

Percival Knight
I have been an experienced Binary Options trader for more than ten years. Mainly, I trade 60-second trades at a very high hit rate. My favorite strategies is by using candlesticks and fake-breakouts