Binary Betting Examples

Binary betting involves the prediction of an outcome happening. This type of binary betting is becoming more and more popular. The reason is losses or profits are fixed when bets are made.

Binary bets are offered on a variety of markets on the exchange. These betting markets include commodities, currencies, and indices. Types of bets include straight bets by predicting events will happen.

Other bets are predicting market prices to stay within a range. Still other bets are if a price hitting a certain strike price. There are many different binary bet types offered by a betting firm.

Binary bets close at 0 or 100 as the event will either happen or not. The binary bet is priced from 1 to 100 with spread betting firms. A few examples can clearly show how binary betting works on trades.

The FTSE Example

The first example is on the FTSE's closing price which is in 2 hours. It is currently down 15 points from yesterday and a firm offers. The betting firm’s offer is a bet on the FTSE to finish UP for 20-24.

A trader believes the FTSE will rally and close higher than yesterday. Therefore, buys the binary bet at 24 for a stake size of £5. The FTSE ends the day by making a 24 point increase, a winner.

How to Calculate Profits

Profits are taking 100, as the event occurred, and subtracting 24. The result is 76 points and is multiplied by the trader’s £5 wager. The resulting number is the profits a total £380 the trader gets.

The FTSE might have closed down for the day and resulted in loss. This bet would have closed at 0 since the event did not occur.

The cost of the binary bet, 24, is multiplied by the stake size. This is how to determine the losses a trader will have on a binary. The total loss a trader must pay on this binary bet is £120.

A one-touch bet is another type of binary bet that can be traded. It is seen in the following example on a currency binary bet. The market shows sterling against the dollar has been rising all day.

A trader believes the trend on the currencies will continue. The trader does not want to bet the currency will close at a price. The bettor wants to bet it will just touch a certain price point.

A spread betting firm is offering a one-touch bet on the GBP/USD. A binary bet is the price the instrument will touch 14450 for 22-26. A trader buys the binary bet at £8 per point as one’s wager.

The sterling in fact touches the 14450 price by the end of the day. So this binary bet closes at 100 as the event did in fact occur. The buy price of 26 is subtracted from 100 and multiplied by £8.

The total profit on this binary betting example is £592 for a trader. The trader entering this bet knew that the potential risk was £208.

Binary examples are beneficial to show how one can find losses. This way it allows traders to adjust stake sizes on binary bets. This helps to increase or decrease a trader’s risk as necessary.

Share and Enjoy :

• 
• 
• 
• 
• 
• 
• 
• 
• 
• 
• 
• 
• 
• 
• 
• 
• 
• 
• 
• 
• 

Comments & Ratings

---