This is a completely new instrument that is traded on two levels, as upper & lower levels. Your broker platform determines both of these levels. The only task you need to do is predict whether the price of your specific asset will stay below that range or surpass it.
You have the liberty to choose the expiration time all by yourself. But you need to keep in mind that a longer expiration time widens the boundaries.
How does the Boundary Options trading works?
Binary options boundary instrument allows the traders to visualize the possibility of an asset’s price, confined within the range over a certain period. Hence, it means that if there is an insight into a price hike of a particular asset within a specified period of time, then you can bet on the same speculated price hike. To carry out this process effectively, keep the expiration window at a definite time period. And now you can call it entering a boundary options contract or boundary instrument trading.
If the price closes within this pre-determined range and time, then the trade will generate enormous gains. And if the prices fall below or above the range, then the trade will finish, ‘Out of the Money.’
But you can also use the boundary options instrument in a different manner! Suppose if you think that the price of an asset will fall outside a pre-determined range. Then you can bet either below or above that window for the next definite time span. In such cases, the trade will be a success and profitable until the prices are not caught within the pre-determined price range.
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