Range options are another type of exotic options in which profit is registered when the trader managed to correctly determine whether the underline asset’s rate in the predetermined expiry time is inside or outside a given range.
When entering a range option, the trader will be given three different rates- the market rate for which the asset trades at the moment, an upper rate and a lower rate. An “in range” option will prove a winning option if the expiry rate is anywhere between the upper to the lower rate. An “out-range” option will prove a winning option if the asset’s rate at expiry time will be anywhere on the chart- outside the given range.
Range options are mostly traded when major upcoming events are expected or when the market displays sharp movements for any other reason.