Can Binary Bets Really effect the FTSE settling higher or Lower?

[MarvinS]

I was tempted into trading Binary bets and was wondering to what degree, with the FTSE or for that matter any market being close to unchanged at expiry. Would the expiry price be influenced by the influx of binary exchanges or by companies that offered binary products.
Is there enough volume in Binary to make this assumption?

 

[Tuffty]

As far as I'm aware binary bets never touch the real market rather like sporting bets don't influence outcomes of sporting events (unless something naughty is going on) as there is no direct way the bookie can hedge binary bets.

 

[MarvinS]

Binary bets are just bets that are not hedged on the underlying - does that mean they have no influence whatsoever come expiry of the markets. I speak to a lot of traders and they give me the impression that binary bets are market manipulative, not physically but psychologically.
Do you think binary's are done in enough size to infuence? I know most of the volume probably goes on up/downs and expiry ranges, but quite how much is hard to tell. I think its probably worth £5m per annum to IG index, thats 10% of their profits.

 

[Tuffty]

At £5m profit with 5% margin say that would mean £400k in bets placed per day (very approx). Not much in the grand scheme of things to influence. Not sure how they could be market manipulative in a psychological way unless fund managers are placing binary bets on their own behalf and this influences their daily decisions in their jobs.

 

[MarvinS]

Yep you are right that kind volume would not justify any kind of market manipulation. Do you think that some market makers play off the back of this. Can corporations trade these daily binary's?