Fixed-Odds Financial Betting Strategies - Financial Spread Betting UK

 

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Terms, Examples, and Strategies of Application

There are a lot of different trading terms in fixed odds betting. Unfamiliar words can be difficult to understand at first for traders. Descriptions of these terms can help comprehend financial investing.

Looking at specific trading examples is helpful in learning words. Strategies of application and how to attack a trade may be useful. These can be used prior to investing in these particular bets.

Digital options is a term frequently heard in fixed odds betting. It is called binary options and involves betting on two outcomes. Digital options pay a set amount on a win bet or nothing on a loss.

Digital options is called forex options and allow a customised a bet. The investor may choose payout amounts, barriers, and expiry dates. Allowing traders to customise bets gives a lot of control of the bet.

Trading examples of forex options can further enhance understanding. Using application strategies is helpful in learning about options.

Double One-Touch Option Strategy

Trade using the double one-touch option when volatility is high. One believes in 3 months the NZD/USD will trade 0.5100 or 0.5400. A trader believes one can make $8,000 on this digital option.

The trade order should be buy 3 months of a double one touch option. The digital option should have barrier levels 0.5100 and 0.5400. A $15,000 payoff for a premium of $1,800 should be included.

This bet wins if the prices break out of either of those levels. This must happen within the expiry date of 3 months to be a winner. If this happens the trader will receive a payoff of $13,200.

Digital Options Example

A trader good at predicting but poor timing would benefit from this. A trader believes the Euro will be above the AUD at 1.0700. The expiration on this currency digital option is a date of 2 months.

The trade order is a call option on Euro and a put option on AUD. The payoff would be $5000 with the cost of the trade at $800. The bet comes in as the price of the Euro hits the strike price.

These strategies are helpful for traders who struggle in investing. Digital options are great as they capitalise on a trader's strengths. Digital options also minimises a trader’s risks and losses on bets.

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