Fix Income Return are fixed-odds trades where the trader has one directional decision to make, will the value of a particular asset go up or down over a set period of time. On expiry of the Fix Income Return you will either win, lose or breakeven.
How to trade Fix Income Return?
1.Choose your asset Select the product you wish to trade, you can trade currencies, shares indices and commodities.
2.Select direction Up or Down?Decide whether you think the price of the asset you’ve selected will be higher or lower at expiry.
3.Choose expiry timeDecide how to long you want the trade to last, we have have expiries from as short as 30 seconds through to 6 months.
4.Chose your stake size Enter the amount you are prepared to risk on your FRO trade you can start from as little as £25.
Types of Fix Income Returns.
What is a Digital Option?
Digital trading is the widely known and most popular form of Fix Income Return trading. Given the market rate, traders are required to determine whether the price of an option will rise or fall before the predetermined expiry rate.
When entering a “call” option, the trader determines that the price of the chosen asset will be higher than the rate with which he entered the trade, at the expiry time.
For example: Given an assumed time of 13:00, the predetermined expiry rate of 13:30 and the Gold market-price of $1.200. If the trader has a fair reason to believe that the price will be higher than $1.200 by 13:30- a call option will be entered.
When entering a “put” option, the trader determines that the price of the chosen asset will be lower than his strike rate at the expiry time.
For example: Given an assumed time of 13:00, the predetermined expiry rate of 13:30 and the Gold market-price of $1.200. If the trader has a fair reason to believe that the price will be lower than $1.200 by 13:30- a put option will be entered.
When trading currencies in the “Digital” mode, “Close” and “Extend” options are available starting 5 minutes after the trade has begun and until 10 minutes before it expires (trading tools are not available when trading stocks, commodities and indices).
What are Touch Options?
Touch\No Touch options, an extension to One Touch Options, operate the same with one major difference- the option will expire in the money and will register the trader’s profit as soon as the asset touches the predetermined barrier; thus a winning option may expire prior to the predetermined expiry time.
If the asset will not touch the predetermined rate by the expiry time, the option will be closed out of the money and the trader will lose the full premium he had set on this investment.
What are range options?
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.
What are Turbo Options?
Trading turbo options is similar to trading Digital Options, but with one difference- these options expire times are 1, 2 or 5 minutes.
Turbo options have a greater upside potential with somewhat longer trends and are meant for trader’s whose eventual profits are more important than hit rate. Upon recognizing an ongoing trend, turbo options allow the trader to trade the same trend with different and consecutive strike rates. Entering consecutive trades with rising investments increase winning probability.