Bungee options

From Binary Options Trading Wiki

Bungee options also known as bungee bets, are a simplified option that let even novice traders the opportunity to profit from the fluctuation of the market with low cost, short term durations and fixed payout model, Bungee options were first to introduce by IGindex

Bungee options trading is a unique type of fixed term, fixed payout investment. What make bungee options trading to different it the short term durations of the investment (hourly binary options, 15-min bungee options and 5-min bungee options) Some of the main features of vanilla options are exist in binaries as well:

   * Strike price
   * Expiration
   * Payout structure
   * Call option side
   * Put option side

Bungee options trading is a limited risk investment product with predetermined risk and reward.

The Bungee is a unique limited risk bet that stays 'alive' even when your safety level is breached, giving you the chance to bounce back into profit. Our built-in 'Floor' or 'Ceiling' ensures that the price will not exceed the stated level, however far the underlying market may move.

With a Bungee option you know that your bet cannot settle at any worse than our Floor or Ceiling level, whatever happens to the underlying market. And because your position remains open even if the underlying market is currently through your safety level, you can still make a profit if the market comes back later in the day.

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How do Bungee options work?

Every Bungee option has a built-in Floor or Ceiling level, beyond which the Bungee price cannot move. This means that a Bungee Bet is a strictly limited risk proposition.

The Floor or Ceiling of a Bungee works very much like a Stop level, as it ensures that you cannot lose more than a given amount on your position. But there is one key difference: if the underlying market breaches the Floor or Ceiling level, your Bungee position stays open. So if the underlying market swings back to your favour later in the day you can still make a profit. This is especially useful in volatile markets where sudden dips and blips can interrupt the general trend of the market.

On any given dealing day we will offer a range of Bungee Buys, with a built-in Floor level, and a range of Bungee Sells, with a built-in Ceiling, against selected underlying markets. For instance, we may offer a Bungee Buy on Daily Wall Street with a Floor of 12900. The price for this Bungee Bet cannot therefore move any lower than 12900, however low the underlying market (i.e. Daily Wall Street) may fall.

If your bet is still open at the expiry time it will be settled at the official closing level of the underlying market, or at the Floor/Ceiling level if the official closing level is currently beneath/above the Floor/Ceiling.

Please note that it is not possible to 'sell' a Bungee Buy or to 'buy' a Bungee Sell, and you cannot place regular Stop or Limit Orders on any Bungee option.

Other common terms for bungee options are: Binary Options, Digital Options,All-or-nothing-Options,and Fixed return options