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Binary Options: Fixed Odds Financial Bets by Hamish Raw

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6. Rangebets

6.0 Introduction

The rangebet enables the trader to bet that the underlying will finish between two prices, the upper and the lower strikes, at some time in the future.

The rangebet enables the bettor to back a view that:

  1. The Microsoft share price will close between $26.50 and $28.50 on the last day of September.
  2. The price of WTI oil is between $125 and $135 at the year end.
  3. The dollar/euro exchange rate closes between 1.55 and 1.60 on the last day of August.
  4. The change in the next US non-farm payroll is between +100,000 and +125,000.
  5. The Fed Funds rate is between 75% and 6.25% in six months time.

6.1 Price Specification

Random walks are again used to determine winners and losers and in this example (Fig 6.1.1) ...

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