So, looking at binary options and I cant see how they would make money in the long term. You may have an edge in knowledge of your particular trade vehicle, but can you predict the direction of the next 60 sec, 60 min or end of day ?? You could be right about the direction, but it could just as easily pull back or jump up during the terminal time frame. Also, I am not a statistician or mathmatician, but if you gain 65-80% per winning trade and lose 85% per losing trade it seems that the house is stacked against you..I do like the non commission structure, but also I am sure that has been factored into the % for win/loss ratios.
Binaries blah... anything i see heavily advertised i always think i should be selling to.. haha.. i should look into these more.. i definitely think the are heavily marketed to the public is less complex vehicles..
definitly read this.. http://en.wikipedia.org/wiki/Binary_option knock out options.. pay out on touch of strike... read that then ask question
I looked at Nadex already since it is the only US regulated exchange for binary options and was very underwhelmed. The bid ask spread is substantial, the profit vs loss is minimal/moderate, the loss is 100% if wrong and there are few choices for assets to trade. That leaves the Cyprus based "betting" houses...not a good choice.
WIth Nadex, you can sell or "exercise" your option at any time-- unlike the cyprus dealers-- basically, it can be traded like anything else whereas with the dealers one needs to hold until expiration. This is a huge advantage. surf
yeah.. that way you can exploit the nonlinearity of point A now.. and Point B expiration.. if its worth more between now and then.. don't you wanna have the option to sell it?
Never looked at these and I thought initially that these are one-touches that trade (that is, if gold touches 2000, you get a $100), not digital options (that is, gold has to be above 2000 at expiration). In the digital case, I can't see ANY advantage over vanilla option spreads, the payoff is identical.