## Binary Hedge?

This is a discussion on Binary Hedge? within the Fixed Odds & Binary Betting forums, part of the Markets category; Hello, Could someone please tell me if I have this correct? On Binary Bet, One 'conventional' bet. Binary (Stake: \$10): ...

 Jan 3, 2007, 12:25am #1 Joined Oct 2006 Binary Hedge? Hello, Could someone please tell me if I have this correct? On Binary Bet, One 'conventional' bet. Binary (Stake: \$10): FTSE to close UP for 3 Jan SELL 33.8 BUY 38.1 BUY @ 38.1 WIN = (100-38.1)* 10 = \$619 LOSE = 10 * 38.1 = \$381 Conventional: FTSE to close Below 6310.90 Odds: \$1.34 Hedge = \$381/1.34 = \$284.33 Outcomes: FTSE Closes UP: Binary WIN \$619 Conventional LOSE \$284.33 NET WIN \$333.67 FTSE Closes DOWN: Binary LOSE \$381 Conventional WIN \$381 NET EVEN FTSE Closes UNCHANGED: Need to check the rules on this Is this correct? Or have I missed something here? many thanks!
 Jan 3, 2007, 1:16am #2 Joined May 2005 Your binary calculation is fine, but for decimal odds you lose \$381 if FTSE is up, and win only 381 * 0.34 = \$130 if FTSE is down. That's assuming you are *backing* in decimal odds at 1.34 on FTSE to finish down.
 Jan 19, 2007, 10:53pm #3 Joined Jan 2007 So technically could u use this on every trade and either win or break even????
Jan 20, 2007, 12:18pm   #4

Joined Mar 2006
Quote:
 Originally Posted by therester So technically could u use this on every trade and either win or break even????

No, his figures were worked out incorrectly.

If the FTSE finished down, then he would lose \$381 on the binary bet and WIN \$96.67 on the conventional bet, with an overall net loss of \$284.33.

Blu-Ray

Jan 20, 2007, 12:49pm   #5
Joined Jan 2007
Quote:
 Originally Posted by Blu-Ray No, his figures were worked out incorrectly. If the FTSE finished down, then he would lose \$381 on the binary bet and WIN \$96.67 on the conventional bet, with an overall net loss of \$284.33. Blu-Ray

SURELY THERE MUST BE A WAY TO HEDGE THESE BETS AT LEAST TO MAKE A MINIMAL LOSS RATHER THAN BREAKING EVEN?

Jan 20, 2007, 12:59pm   #6

Joined Mar 2006
Quote:
 Originally Posted by therester SURELY THERE MUST BE A WAY TO HEDGE THESE BETS AT LEAST TO MAKE A MINIMAL LOSS RATHER THAN BREAKING EVEN?

Yes you can, but you would be placing a bet with the binary near 50 and the conventional bet around the 2.00 mark, so you would take a minimal loss, but you would also take a minimal win if correct.

Hope this helps

Blu-Ray

Jan 20, 2007, 1:04pm   #7
Joined Jan 2007
Quote:
 Originally Posted by Blu-Ray Yes you can, but you would be placing a bet with the binary near 50 and the conventional bet around the 2.00 mark, so you would take a minimal loss, but you would also take a minimal win if correct. Hope this helps Blu-Ray