Bungees and Binary

[oiltanker]

with a stoploss you can be right about direction but still get stopped out.

anyone use bungees [ig] or binary to overcome that?

given time is part of the price is there an optimum time when to use them [assuming one has a market opinion]?

if someone could explain the algo behind it or point to some info on them that would be great.

 

[shadowninja]

Have you seen the spreads? You're definitely paying for the service...

 

[TheBramble]

with a stoploss you can be right about direction but still get stopped out..

Which is where timing comes in. Or more appropriate stops of course.

 

[tar]

with a stoploss you can be right about direction but still get stopped out.

anyone use bungees [ig] or binary to overcome that?

given time is part of the price is there an optimum time when to use them [assuming one has a market opinion]?

if someone could explain the algo behind it or point to some info on them that would be great.

I agree , many times u get the direction right but u get stopped out ... If u r good at getting the direction right but your entries is not really good then Bungee bets will solve this problem , anyway Bungee is a daily option premium added to the strike price incase of a buy bungee , or subtracted from the strike price incase of a sell bungee . But u should take the bungee early so u have time to cover the premium and make decent profits , for example : Ftse bungees is available the day b4 , during the US session from 17:00 pm and that will give more room for the FTse to change direction , u have the US session after the LSE close and then overnight session during Asia hours then LSE opening then economic figures around 13:30 then the US opening at 14:30 ...
http://www.trade2win.com/boards/fixed-odds-binary-betting/32214-bungee-bets-igindex-anyone.html

 

[oiltanker]

yes bungees cost a bit.

i'm thinking more longer term trades. i wouldn't want a 200pt stoploss off a daily chart but 30pt binary would be aright.

 

[oiltanker]

I agree , many times u get the direction right but u get stopped out ... If u r good at getting the direction right but your entries is not really good then Bungee bets will solve this problem , anyway Bungee is a daily option premium added to the strike price incase of a buy bungee , or subtracted from the strike price incase of a sell bungee . But u should take the bungee early so u have time to cover the premium and make decent profits , for example : Ftse bungees is available the day b4 , during the US session from 17:00 pm and that will give more room for the FTse to change direction , u have the US session after the LSE close and then overnight session during Asia hours then LSE opening then economic figures around 13:30 then the US opening at 14:30 ...
http://www.trade2win.com/boards/fixed-odds-binary-betting/32214-bungee-bets-igindex-anyone.html

thanks

 

[oiltanker]

from the little i have found about strats for these instruments it seems as long as you are prepared to wait for the setup and buy them say 35 or under then they can work. so unlike normal trading you look for volatility like news or big stop killer retraces to get the best value.

thinking out loud--- so last year with vix above 50 could have been good for them?

 

[donaldduke]

With binaries you most definetely have to buy the low priced ones. IG Index one the main providers delibrately prices low priced binaries even lower than they should, and they also price high priced binaries higher than they should be.

For a example: they will price what should be 75 binary (middle price 75, ie a 72-78) at a midprice of 80 or above. And a what should be a binary with middle price of 25, they will be priced at a midprice of 20 or below.

They know that the majority of punters will buy the 80 bet and sell the the 20 bet.
So not only will they earn the spread they will also take an extra 5 pts from the majority of punters with this deliberate 'mispricing'.

Very few binary bet punters buy low probability binaries (ie buying below 50 and selling above 50).
This is because most punters cant handle losing streaks and want a high probablity of winning on each bet.

If you want to go the other way and bet against them and take the low probability bets, you first have to overcome the wide spread and secondly if you start to make money with this strategy they will limit your size to ensure you dont win too much.

 

[shadowninja]

yes bungees cost a bit.

i'm thinking more longer term trades. i wouldn't want a 200pt stoploss off a daily chart but 30pt binary would be aright.

Look at it. They factor this in.

My thinking on such products is that they are really only suitable for the more experienced trader who is already a very successful trader and wants to maximise their trading. Of course, I know nothing about you, so if you are already a very successful trader, go ahead.