Binary Betting

What Is Binary Betting?

Binary betting is the recent product to emerge from the spread betting industry which provides an innovative and exciting look to trade the financial markets. The main feature and advantage of binary form of betting is that one know beforehand the utmost upside and downside.
There are only two possible results from a binary bet, the occurrence of an event or not. It is quoted on an index between 0 and 100. If the event occurs then the market settles at 100 and the market settles at 0 in case of non-occurrence of the event. It always scores either 100 or 0 and one can buy or sell at any point of time.
Different types of binary betting:

Standard: This refers to placing bets on the Financial Times Stock Exchange (FTSE) at the time of day-closing.

One Touch: The bet is automatically settled at 100 if the market reaches or goes through a definite level.

Range bets: It refers to the quoted price which depends upon market high or market low level.

Benefits of Binary Betting:
Opening and closing of bets at any time when the City Index binary market is opened.
Controlled risk and high volatility.
Presence of narrow spreads.
One can place his bets on hourly, intraday or daily markets.

It is not regulated by the Financial Services Authority (FSA) and therefore several protections are not available to the investors.


The winnings and losses are calculated in the undermentioned way:

In case of a purchase. Profit/Loss = The price at day’s closing minus the day opening price times the bet size.

In case of a sale. Profit/Loss = The price at day’s opening minus the day closing price times the bet size.

Strike price is the price the market need for occurrence of the event to make it either 100 or 0.

Floating Binary is the commonest type of binary bet in which the binary price moves but the strike price is fixed. Fixed Binary is a bet where the strike price moves but the the binary price remains fixed. Both floating and fixed binary bets are opposite to each other.
Conclusion:

It is quite simple way of placing the bets in the markets. It provides clear chances where the conventional style of betting fails. This is largely dependent on the volatility of the market and of there is a availability of a high statistical probability then one can increase his chances to increase profits.