Just wondering if anyone had exp. with binaries..ie all or nothing. What were some of the pros vs. cons? Who did you trade with? thanx for the help.
Also see more in the literature lately. What is the best pricing model? What markets and brokers offer these instruments? dsss27
Look for older posts by Riskarb. He did/does quite a lot with them, some very shrewd hedging through other instruments eg. with normal, (he calls them vanilla) options. Sadly Riskarb is not able to post here anymore. He has his own forum now. Ursa..
If you want to get a feel for forex binaries, you can sign up at OANDA for an "FX Game" account. For stock indices, there is Bet On Markets. Soc Gen also offers some binaries, I think. Here is what I have learned from the "game account": the edge loss with OTC options can be rather significant. These are not the kinds of contracts you want to flip! Instead, you want to hedge with the underlying (spot), dumping the position just before the barrier is reached. The trick is in the hedge. I stopped playing because I find trading forex harder than trading stocks, indices, and plain vanilla options. If one is good at trading forex, then one could probably make good money with exotics. One huge advantage: pre-determined risk (kind of like a OTC version of a vertical). No risk of blowing up because of some black swan move. Either you win and win a predetermined amount, or lose and lose a predetermined amount. Btw, if you're asking because you saw an article in one of those trading magazines, be careful. That article was pretty weak, imo.
That's a smart move, I tried to PM the address to PT and got only *****'s instead of www.************ Ursa..