RANGE BINARY
The range binary structure has been developed primarily for trading purposes and is essentially a bet on a spot staying within a given range. The strategy is often linked with a deposit for yield enhancement purposes.
A range is specified by the customer over a fixed period. A premium is paid up front and provided that the spot stays within the range (as monitored on a 24-hour basis), then a multiple of the premium invested will be payable. A rebate range binary is one in which the premium invested is rebated if a designated boundary of the range is breached first. A similar structure, the limit binary, is also essentially for trading. This is fundamentally a bet on a spot not staying within a predetermined range. The customer specifies two spot rates, one above and one below the current spot rate. A premium is paid up front, and providing that both levels trade (as monitored on a 24-hour basis), a fixed multiple of the premium invested will be payable.