BOBO strategy (OBIF) has been invented by the Italian trader OB60 and it stands for Binary Options Boundary Out.
As the name implies, through this strategy we invest in the boundary options. In this type of binary options the trader can choose whether to trade within a range of prices (IN) or outside a price range. The broker sets a price range and the trader must predict whether in a given timeframe the price of the chosen asset will end in or out of this range.
Generally the price range is not the same for the inside and to the outside. For the inside it is a bit ‘tighter and the outside is a bit wider. When the trader opens the boundary option the purchase price is exactly at the center of the range indicated by the broker whether it is an option IN or OUT.
Trading with BOBO, at the option deadline, the trader expects the price to be outside the price range of when he bough it. Obviously, before the trader purchases the option, he will see on the chart of the broker the current price and two parallel lines defining the interval, and these lines will move based on how the current price changes. In the moment in which the trader purchases the binary option, the range will be set according to the purchase price. This way, the trader has to hope that at the trade deadline the price will close or above the maximum level of the range or below the minimum level in order to close in profit. If the price of the asset closes within this range, the option will result in loss.
The best broker that we currently recommended for this type of investment is undoubtedly 24option. We used it over and over again and the results were surprising.
Attentive readers will have surely already realized that with this type of investment we have shifted the focus from management to the volatility. That’s right, we do not care about the direction that the price will take after we buy the option, it can be up or down, but we don’t care about it, what we really care about is that the price will move from the current value, in one direction or another, and the important thing is for it to move for a certain number of pips.
How the strategy was born
OB60 has noticed, and how he also many other traders who follow the markets, which in proximity of the publication of certain economic news prices undergo strong jolts a few moments before publication or in many cases even several minutes. This high market volatility is not generally predictable in direction, but we don’t care about that, we only care that there is volatility. Clear? We do not care about the direction, we are only concerned that the price suffers a jolt.
How to apply this strategy
In order to apply BOBO strategy we need, first of all, to know the timetable of the news release, and for that you can look directly at the economic calendar.
Then we must be ready to open a boundary option OUT being careful to choose as its deadline the one of the release of the news that we have selected. Since this date is made available by the broker about 30 minutes before, it means that if we want to open a BOBO on the 9:30 news, we have to check that this deadline is available on the broker approximately at 9:00. Generally, we find available up to 8:59 the maximum deadline of 9:15 that is not good for us. Only at 9:00 the broker allows investments with a deadline of 9:30.
Therefore if the news will be published at 2:00pm it means that we have to be ready to open the investment at 1:30pm.
In these 30 minutes the price can move often within the selected range especially in the minutes and seconds before the release of the news. The price can also swing immediately reaching price ranges far from the one we bought and for us this is the best case because we can decide to close the option, even before the natural deadline, achieving an immediate profit lower than the preselected one that usually is the 70% of the invested amount. It can also happen that the price stays within the range we selected and in this case we close the option in loss. But, if you notice, it happens very often that the price is very unstable before the publication of an important economic news and this will play to our advantage.
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What economic news to select?
It is best to select the high volatility news (3 bulls), which are those that generally create higher volatility such as the Non Farm Payrolls. This news is related to the USD currency and is usually released on the first Friday of each month. But, like this one, there are many others, for instance those related to home sales, interest rates or the chairman of the Federal Reserve speeches.
Attached you can find some samples of investments based on BOBO strategy created by OB60.
In my opinion it has been the best binary option strategy of the 2015.
Before actually investing we invite you to open your own demo account with 24option so you can test it in demo account mode and then possibly decide to invest in real money mode.
Like any other trading strategy, it doesn’t guarantee 100% success, but because the results have been many and absolutely encouraging, we can tell you that with a good money management, considering the occurrences with which we closed the Trade In The Money, you can get positive results over time.