Very low volume on Binexx?

This is a discussion on Very low volume on Binexx? within the Fixed Odds & Binary Betting forums, part of the Markets category; In my opinion it is possible to make a nice income purely from trading the binary bets / digital options. ...

Reply
 
LinkBack Thread Tools Search this Thread
Old Nov 15, 2005, 2:38pm   #29
Joined May 2001
In my opinion it is possible to make a nice income purely from trading the binary bets / digital options. I’m not suggesting that it is easy for everyone to do this and there is clearly a need for good deal of experience.

They key is to ‘think outside the box’. You need to consider that for the most part the companies know what they are doing with their various pricing models. The key is identifying potential miss-pricing. By ‘miss-pricing’ I don’t mean a pricing error, I’m talking about times when they apply an inappropriate pricing model once all available information is considered. These times present enormous potential for some extremely large profits provided that people are careful.

Obviously I’m a little cautious about sharing too much on here because you never know who is lurking.

If people want more information then do ask.

Steve.
stevespray is offline   Reply With Quote
Old Nov 15, 2005, 2:54pm   #30
 
Anonymous's Avatar
Joined Jun 2005
[QUOTE]binary arbitrage merchant ... bb connection /QUOTE]

Sorry, I don't know what they are.

An Exchange (including recognized Exchanges) makes money from the fees and commissions and other income it generates from its members. If its members don't know how to make money the Exchange's income will go down, and it may even have to close shop if it cannot get more capital injection into the Exchange.

If most of its members know how to make money, not just by deriving winnings from among themselves but also from other exchanges, then everyone stands to gain.

I remember reading an ad in the papers some weeks back about some company, I think it was KPMG, that was giving a public seminar on financial trading. The topics included Binary Options.
__________________
I bid high and I ask low.
Anonymous is offline   Reply With Quote
Old Nov 15, 2005, 3:15pm   #31
Joined Aug 2004
Quote:
Originally Posted by stevespray
In my opinion it is possible to make a nice income purely from trading the binary bets / digital options. I’m not suggesting that it is easy for everyone to do this and there is clearly a need for good deal of experience.

They key is to ‘think outside the box’. You need to consider that for the most part the companies know what they are doing with their various pricing models. The key is identifying potential miss-pricing. By ‘miss-pricing’ I don’t mean a pricing error, I’m talking about times when they apply an inappropriate pricing model once all available information is considered. These times present enormous potential for some extremely large profits provided that people are careful.

Obviously I’m a little cautious about sharing too much on here because you never know who is lurking.

If people want more information then do ask.

Steve.




I've actually stopped using my models for the binary business I do, it was clouding my opinion too much and I spent a lot of the day working out what implied the mm were using in their models. I just trade like anything else now, if I think its going up I buy e.t.c.

I am making money over a period, but go through periods of hell, like everyone.

But the worst pain I had trading binary options was when I realised that one of the exchanges/SBs had the wrong expiry time in their model - of course I traded very large (transacted small lots over a couple of hours) - the mkt closed with me being 10 points in the money anf the binary still showing 80/85, they then realised and closed the market - - - - guess what then - - - - -the closing auction move was 12 points !!!!! A CLASSIC !!!!!


Ananymous :- bb = broadband
apples10 is offline   Reply With Quote
Thanks! The following members like this post: Sharepunter
Old Nov 15, 2005, 3:32pm   #32
Joined May 2001
[QUOTE=Anonymous]
Quote:
binary arbitrage merchant ... bb connection /QUOTE]

Sorry, I don't know what they are.

An Exchange (including recognized Exchanges) makes money from the fees and commissions and other income it generates from its members. If its members don't know how to make money the Exchange's income will go down, and it may even have to close shop if it cannot get more capital injection into the Exchange.

If most of its members know how to make money, not just by deriving winnings from among themselves but also from other exchanges, then everyone stands to gain.

I remember reading an ad in the papers some weeks back about some company, I think it was KPMG, that was giving a public seminar on financial trading. The topics included Binary Options.
Anonymous….

If the market maker / exchange wants business then it has to ensure sufficient liquidity. This ensures that the market is tradable and that the spreads are reasonably tight. If it is a new market then the only way to provide liquidity is for the exchange to do it themselves. They do this in the hope that they will draw in customers which will further add liquidity thus leaving them in a situation where they don’t have to take positions against customers. They purely aim to make on the spreads.

Other companies my purely price from an algorithm which they have devised themselves. Customers positions may of course feed back into that algorithm but the basic concept is still to make money on the spread (by selling / charging customers less than / more than true value).

No matter which way you look at it these markets are ‘grey markets’ for the companies concerned. There is no easy way for them to hedge the positions which they take against customers. This obviously makes them pretty vulnerable if people start winning big. The companies are not stupid, they know that if they delay order execution then an advantage can be gained using an element of hindsight. In essence they are just adding to the ‘hidden costs of trading’. No doubt about it that it is cheating.

Most companies appear to dislike successful scalpers who appear to defy the law of averages. Consistent winners who trade in this manner always seem to end up with appalling levels of execution – the companies do this on purpose to deter that method of trading – is it legal? Hard to say. FSA Conduct of Business appears to state that a company which delays a customers instruction has to be able to show that the delay was introduced for the benefit of the customer. I feel that certain companies might have a hard job showing that.

Steve.
stevespray is offline   Reply With Quote
Old Nov 15, 2005, 3:43pm   #33
Joined Aug 2004
And we all know that binary options aren't covered under FSA regulations, therefore they'll keep doing it.

You've just got to trade under their radar screens, keep size small, don't do too much scalping, just let positions run more, take losses on the head, and don't complain to them (as then your account will be watched like a hawk, then see the number of non-fills go up!).

But Binary Options are great fun, and a bit addictive!!

rgds
apples10 is offline   Reply With Quote
Old Nov 16, 2005, 8:28am   #34
Joined May 2001
Quote:
Originally Posted by apples10
I've actually stopped using my models for the binary business I do, it was clouding my opinion too much and I spent a lot of the day working out what implied the mm were using in their models. I just trade like anything else now, if I think its going up I buy e.t.c.

I am making money over a period, but go through periods of hell, like everyone.

But the worst pain I had trading binary options was when I realised that one of the exchanges/SBs had the wrong expiry time in their model - of course I traded very large (transacted small lots over a couple of hours) - the mkt closed with me being 10 points in the money anf the binary still showing 80/85, they then realised and closed the market - - - - guess what then - - - - -the closing auction move was 12 points !!!!! A CLASSIC !!!!!


Ananymous :- bb = broadband
Apples…

As you say, ‘Binaries’ are quite exciting and indeed can be quite addictive. My point however is that you can turn your ‘hobby’ into a profitable income flow providing you develop a reasonable system.

You actually developed you own binary model then? That is quite interesting. I’ve never considered doing that. Can I ask what you primary purpose for developing the model was? Was it just interest or did you have a theory which lead you to believe that you could gain some kind of edge with your own model?

As I said before, I’ve tended to adopt a ‘think outside the box’ type strategy for trading these products. You don’t really need to develop a model of your own to detect these opportunities, it just comes down to pure common sense and reasoning once you think that you see something.

As for your trade which you outlined…I would agree, it seems really bad luck that is screwed up. This is where having accounts with several different companies can pay off. You then have an opportunity to lay off part or all of your exposure with another account. This obviously lowers your risk or indeed can completely lock in your entire profit. A word of warning though…the word is that most of the spreadbetting companies don’t really like people who trade in that manner. They see it as a form or arbitrage which disrupts their basic theories in their business model. They detect potential arbitrage customers by monitoring people who consistently let bets run to expiry and also monitor increases in bet size.

As someone already pointed out – The nature of these products is such that ‘errors’ will always be made. They key is detecting them.

Steve.
stevespray is offline   Reply With Quote
Old Nov 16, 2005, 9:20am   #35
Joined Aug 2004
hi Steve,

developed the model just to see what parameters the firms were using on their pricing, the main factor obviously being what implied volatility. However, I hardly use it now, as I said, it was of little beneficial use.

For instance, at the moment, on the hourly, binexx are using 9% implied. However, if you look at the 30-minute realised vol of the Dec Future it is at 23.7% (the Future is quite volatile this am, there have been 23 occasions already where the 1-minute move has been above 2 points), therefore they have the wrong price at the moment - if the present realised volatility remains. But I'm not temted to buy, as I don't think it'll bounce in the next 20 mins, but will be worth checking again on the 10:30 expiry.

Unfortunately our firewall stops the ig/binary tradescreen from working, so I'm stuck with using Binexx, which is why I only deal as a hobby! Keep thinking about getting a vodafone 3g card for a laptop to trade IG, I should do it really!
apples10 is offline   Reply With Quote
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Similar Threads
Thread Thread Starter Forum Replies Last Post
famous system with low cost ?!! vincent_f Trading Systems 8 May 20, 2007 4:35pm
Spread betting Forex with low leverage fxprocessor Spread Betting & CFDs 3 May 18, 2007 9:18am
Binexx being absorbed into cityindex apples10 Fixed Odds & Binary Betting 103 Jun 18, 2006 7:34pm
Binexx.com API Clement Attlee Fixed Odds & Binary Betting 4 Nov 18, 2005 3:31pm

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)