Binary betting - FTSE / Dow

Wideboy

Well-known member
489 1
Thought I'd start a fresh thread for those of us who wish to discuss Binary betting the indices.

Had another good week, however I have identified a worrying trend in my trading. Last 3 weeks I have been up all days, except Fridays. Perhaps I should work just a 4 day week!
 

Wideboy

Well-known member
489 1
Binary bets have a price between 0 and 100.
When the bet closes it will close at either 0 or 100.

Eg. If you buy 'FTSE to close up' whilst the market is flat you may get a price around 55.
Market starts to rally and closes +ve. The bet closes at 100 as it was 'true' so your profit is 100-55= 45 * stake size.
If however the FTSE fell and closed -ve, then the bet would expire at 0 as it was 'false' so your loss would be 55 * stake size.

They work the same way as conventional sb's, ie. you can buy or sell each price and close your positions before expiry.

They is much volatility in the prices, just a few points move up or down can cause a 20 or 30 point move in a binary price.

They are good in a way that you know exactly what your risk is as soon as you open the bet, as the price you buy at, is the risk in points if it closes at 0.

As well as index up or down they offer point ranges, eg up/down 0-10 points, 10-20 points, up/down>30 etc.

Good opportunities 15 mins or so before expiry if the price is close to a boundary (say 25 points up and in an uptrend) - you could get a good price on a finish up >30 points.

As far as I'm aware IG are the only ones who do binaries at present - they have started a new site dedicated to binaries: www.binarybet.com with minimum bet size of £1 if you want to have a go for little expense.

Bear in mind though that I believe IG are making a packet out of binary bets so be careful. If you have some sensible rules you should be ok. I only trade at prices 25 or below to limit my risk, playing the reversals mainly.

Hope you understand my waffle, having read it again, it seems a bit confusing :)
 

orchard

Active member
163 2
Thanks very much Wideboy, I think our posts crossed, but your explanation is clearer than IGs!!
 

jitasb

Active member
116 3
Seems that the Binary Bet range is expanding all the time....as there are now binary bets on some F100 stocks.
 

Wideboy

Well-known member
489 1
How about another outlook to this binary betting lark:

At the end of the day we are gambling and its an odds game.
Binary bets seem to be sold in the sense that you 'buy' a bet and if it comes true you win.
Now if we look at, for example FTSE ranges (finish up/down 0-10, 10-20, 20-30, >30 etc) what happens is that only 1 of those bets will win, ALL the others will lose.
So, the odds say that if we pick 1 to lose, we are more likely to get it right than pick the only 1 which will win.
Therefore we decide to 'sell' a particular bet and with the law of averages being on your side you should win.
Of course, that does expose us to a rather larger risk than normal. If we sold a bet at 20 then we could lose 80 points if that selection did actually win, for a profit of just 20 points.
We would need to watch the market and use a mental stop perhaps to avoid being killed.

This method has just occured to me today as I sit watching my price list of FTSE 12pm prices, they are all 0 except just the FTSE up 0-10 points bet which settled at 100.
 

jitasb

Active member
116 3
Interesting point...
This has occurred to me previously, but the risk-reward is not good (as you say).
I was thinking of in terms of the DOW, say perhaps selling the bet 0-20 range, perhaps on a 'big news' day..relying on the fact that the market will move one way or the other by a 'largish' amount rather than stay relatively "static".

The big problem is setting the Stop loss, because as time goes on and it stays in your range, then the price will move against you. On the postive side, if there is a big movement the other way, then you will probably get a chance to close early at a profit.

Ta..
 

Wideboy

Well-known member
489 1
I don't wish to give my secrets away but I find the FTSE(12pm) up or down 0-10 points bet quite useful at the moment as FTSE is fairly narrow range most days.
 

Wideboy

Well-known member
489 1
Nice result today, 78 points after buying the FTSE 12pm UP 0-10 pts at 08:45 today @ 22
Made a dent in my loss last Friday of 69 points - must remember not to try and fight the market back after a loss, I made 2 stupid trades and paid for it :(
 

jitasb

Active member
116 3
Missed out on a good opp today on FTSE at 12pm....would have got a good quote on it being down.
Having gapped up, it was struggling to maintain it...then drifted down...It is looking weak compard to the other indicies...

Still...will wait for the next opp...
 

jitasb

Active member
116 3
They have increased the number of stocks being offered as binary bets. Is anyone trading these at all ??

Would be interested in hearing any views ?

Ta..
 

Scripophilist

Active member
221 7
Guys, I've checked the binary bet site and registered. The problem you have here is they are always overround by 5%.

You can't win in the long term, They are selling you a 100% probability at 95%. No matter how clever you are they are "Cheating" you!

Cheating you is the wrong word really but imagine the market price of a stock being 100p. You can buy it in the open market at that price but if you want you can go binary and buy it for 105p.

The only thing I can see these useful as are hedging mechanisms. But you will still "Pay" a 5% commision on each trade effectively.

These are good money earners for IG et al...

They can hedge quickly in the underlying market also.

I've found a way to make money from them, but it involves passing off the risk to somebody else and hedging in the open market.

Check out http://www.probabilitytheory.info if you want to qualify my comments on binary bets.
 
 
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