es/pip wrote:MightyOne wrote:es/pip wrote:MightyOne wrote:dalibor wrote:MightyOne wrote:What do you think about this?
You have until the end of the day to be right
If you cannot beat that then there is no hope for you
firstly - thank you for your work on the forum, excellent job.
secondly - are you trading binary options or use this instrument only for hedging fx spot trades?
thirdly - sorry for my poor english
I am highly considering moving from spot to the Binary Option market.
The combination of a guaranteed fixed amount of risk and reward that is equal to if not greater than that which I can achieve in the spot market are of great allure.
Not only is your risk fixed, but your stop becomes time not price which is of greater ease to work with.
I will say it again ---> unlimited staying power through massive (possibly unexpected) price movements at a fixed risk until the end of the day or week
I don't know about you, but if I cannot be stopped out then I cannot lose.
To the best of my knowledge this is how binary options work:
Binary options or "fixed pay" options are very different than traditional options.
Around every strike price there is a floor and ceiling that are 50 pips away from the strike.
Should you enter at the strike price then your maximum risk would be the floor (50 pips) and your maximum profit would be the ceiling (50 pips).
The floor has a price of 0 and the ceiling has a price of 100.
The floor and ceiling are known as boundaries.
The strike price has a price of 50.
Unlike traditional options, where you enter at the strike price, binary options are purchased at a price in relation to the boundaries.
Binary options can only settle at 0 or 100 upon expiry!
If a call (up) option expires at a price of 51 then the option settles for a price of 100.
If a call option expires at a price of 49 then the option settles for a price of 0.
51 = 1 pip above the strike price
49 = 1 pip below the strike price
As you see, you cannot make or lose any money beyond the boundaries.
The closer to the floor that a strike is purchased the less your risk and the greater your risk multiples.
If you purchase an option 20 pips from the floor then your maximum risk is $20 and your maximum reward is $80 (ceiling of 100 minus entry of 20) or 4 to 1.
If you purchase that same option 20 pips from the ceiling then your risk is $80 and your reward is $20.
If you purchase the option 5 pips from the floor then your maximum risk is $5 and your maximum reward is $95 or 19 to 1.
Binary options have strikes at 20 pip intervals with a floor and ceiling that engulf 2.5 strikes.
Because of this, if price is within 10 pips of a strike then you will always be within 20 pips from the floor of a strike that is two strikes higher or lower than the nearest strike price.
Now that you know which way you are trading and which strike you are looking to purchase you need only wait for a price that offers you an acceptable level of risk.
On NADEX.COM binary options expire either at the end of the day (daily options) or at the end of the week (weekly options) giving you tremendous staying power.
Less than 20 pips risk and you have ALL DAY or ALL WEEK to be right?
How can you lose in the long run if you cannot be stopped out?
And if you thought that it could not get any better you are wrong.
You can liquidate your position at any time prior to expiry thus buying an option for $10 and selling it for $20 ten minutes later if you so choose to do so.
Of course there is always a trade off...
All options are priced at $1 per point up to $100.
Spreads are around 5 pips, but if you think about the cost involved in hedging (when it was allowed) an outright position in the Forex market it would cost you just as much.
Commissions are $1 in and $1 out, but you do not have to pay the dollar out if you lose.
NOTE: OPTION SPREADS are NOT the SAME as a BINARY OPTION
my only concern would be the size you can trade-----
do they have any limits?
what is the maximum?
As many options as you can afford to purchase...
I see any where from 50 to a couple hundred options available at a strike price.
Once they are gone you wait a few seconds for the quotes to refresh and then you can buy more.
I am sure that in the future it will be a larger market.
I really don't have a problem with entering small positions at the same or different strikes until I have a full order.
If you have less than $50,000 then you will have all the liquidity in the world.
going to take a look at it
really interesting, thanks for explanation... unfortunately nadex is only for us residents, but ig markets looks good... and choiceodds offers 5 minute binary of forex - imho good for gamblers but no for traders