Thanks very much for your reply. Yes I really should have given more details!
I didn't mean binary options and intend to steer clear of them. I'm about to experiment (with a 'Trading Academy' 10p per point account at Finspreads) with taking a position early in the day on the FTSE via buying a call or put option as a spread bet. I would do this alongside my existing equity day trades placed with another provider.
In terms of my view, I propose to take a simple view during the first half hour of trading as to the direction the FTSE will take, based on overnight analysis of charts and what I have planned for the equity trades. On a reasonable number of days per year it'll move 30 points in one direction, or more, even if it doesn't close there. It didn't today in useful way, because the bailout news came long before the open, but on a positive but less news-oriented day it seems plausible for it to open near where it closed and eventually reach a high or low 30+ points away.
The plan on a predicted positive day would be to buy a call option close to the money somewhere between c. 8 and 8.30 and keep an eye what happens, with a limit order to exercise it should the profit be equal to the premium paid (thus permitting break-even if 50% of positions are correct).
Taking this sort of position, which could potentially be open 6-8 hours, as a simple spread bet would be unacceptably costly in terms of stops, given the intraday volatility (a stop 30pt away would not be guaranteed to be safe from normal spikes up and down, and would cost as much or more if triggered as an option premium). With the right premium pricing (a big if) daily option spread bets would make it much more possible to take this sort of overall intraday view.
I've been looking a lot at the options discussions here, but they tend to focus on monthly or quarterly options, and almost never on spread bets designed to mirror daily options.
I'd really appreciate any advice, or indeed any savage deconstructions of this possibility, if it's misguided!
do you mean binary options or the options which some of the SB firms provide eg IG has 'options on FX majors'? there's a lot of unregulated binary option brokers, so be careful. some threads over in that section you should read.
Whichever product you are trading it suggests you have some view of where that market is or isnt going, so techniques on how to trade them will be similar to trading other products/markets. Can you be a bit more specific about what you are looking for.....do you want more info on fundamental analysis, or technical analysis? Trading strategies, chart analysis, indicators, broker info, platform suggestions, EAs etc etc?
I would suggest you read the FAQs posts in the threads also.
