RANGE VOLATILITY TRADING

Range / Volatility Trading Range trading, or volatility trading as it’s sometimes Called, gives traders the ability to trade on a range of prices. For example, if a trader believes that the price of Gold is fairly stable, he or she can purchase an option that is “In” the range. On the other hand, if the option appears to be volatile, the trader can buy an “Out” of the range option. Trading Example You decide to trade a range option on Google and think that the Google stock will be stable in the next hour and stay in the tunnel prices that the broker provides so you invests $1,000 on a “In” range option. If you are correct, you will be in-the-money and receive $1,800 at the time of expiration.