TradeSmarter.com Market Weekly Outlook – January 25-29
A busy week is ahead of us: rate decision in the US, Japan and New Zealand and GDP releases from the US, UK and Canada are part of an eventful week. Will we see more dollar strength? Here’s an outlook for the last week of January.
Beginning on Wednesday, the World Economic Forum meets in Davos, Switzerland. In their 4-day annual meetings, many central bankers, senior politicians and business leaders from all over the world chit-chat with reporters and also make official and moving statements. Their sporadic comments can shake the markets during most of the week.
Monday, January 25th: Australian PPI provides a strong start to the week, as this is a quarterly figure that has a strong impact on the Aussie.
American Existing Home Sales are expected to post a big drop after two strong months, and fall to 6.04 million.
Tuesday, January 26th: The Bank of Japan makes a rate decision. While the Overnight Call Rate isn’t expected to move from 0.1%, but the Monetary Policy Statement could sure shake the Yen, especially if economic forecasts are changed.
German Ifo Business Climate is an important survey for the Euro. It’s expected to continue the steady rising trend and edge up to 95.3 points. Last week’s survey, from ZEW, was bad and sent the Euro down.
Britain probably finished the recession. Prelim GDP for Q1 is expected to show growth of 0.4%. The unofficial number from NIESR talked about 0.3% growth, and they are usually correct, so there’s a good reason to be optimistic. Right after the release, Mervyn King will be speaking.
Last week King weighed on the Pound. A volatile time for the Pound.
In the US, the year-over-year S&P/CS Composite-20 HPI is expected to show a smaller drop in the prices of homes, 4.9%. The more important figure is the CB Consumer Confidence, that recovered from a big fall, and is now expected to climb to 53.7 points.
Wednesday, January 27th: Australian CPI is a quarterly release and has a strong impact on policymakers. After a modest rise of 0.1%, Q4 is expected to show a rise of 0.4%. A stronger rise is necessary to push the Aussie higher.
American New Home Sales are expected to recover from last month’s big fall, and rise to 372K. This will be a warmup for the big event.
Bern Bernanke is expected to leave the interest rate unchanged. The Federal Funds Rate will probably stay at a maximum level of 0.25%, and traders will focus on the usually confusing FOMC Statement. Last month, it took the market 6 hours to digest the statement, which seemed balanced at first. As they focused on the upside of the statement, cautious signs of recovery, the dollar rose. But the message sure was confusing.
Also in New Zealand we have a rate decision. The hot air came out of the balloon with low CPI in New Zealand and China’s tightening measures. So, the Official Cash Rate will probably remain unchanged at 2.5%. Hints for future policy will be provided in the RBNZ Rate Statement.
Thursday, January 28th: American Durable Goods Orders are expected to jump by 2.1% after remaining almost unchanged last month. Core Durable Goods Orders, no less important, are expected to do the opposite and rise by 0.4% after a leap last month.
Unemployment Claims that disappointed last week, are predicted to go back down to 452K.
In New Zealand, both Building Consents and Trade Balance will impact the kiwi, with the latter expected to show a smaller deficit this time.
Near the end of the day, Japan will be releasing Household Spending which is expected to rise and Tokyo Core CPI which is still expected to show an annual drop in prices – 1.8%.
Friday, January 29th: European Unemployment Rate is expected to be bad once again. After reaching 10% last month, it’s predicted to rise to 10.1%.
In Switzerland, the KOF Economic Barometer will move the Swissy.
Canada releases its monthly GDP, which is expected to show a 0.3% growth, better than the previous month. Last week’s rate decision hurt the loonie. USD/CAD will shake during this time, especially with the next release.
American Advance GDP for Q4 holds high expectations: an annual growth rate of 4.6%. After exiting recession in Q3 with a 2.2% growth rate, things are expected to get better in Q4. This release will shake the markets.
Chicago PMI is predicted to post a small drop, and the Revised UoM Consumer Sentiment is expected to be revised to the upside. Both events will be overshadowed by the Advance GDP release.
Market Weekly Outlook was brought to you by our partner ForexCrunch.com
Disclaimer: Binary Options Trading might carry potential rewards, but also potential risks. You must be aware of the risks and willing to accept them in order to trade in the financial markets. Don’t trade with money you can’t afford to lose.
TradeSmarter Moves to 24-hour Trading Day
We are pleased to announce that as of January 12, 2010 TradeSmarter has extended trading hours to offer a 24-hour trading day. TradeSmarter will now be open from 11:00 pm GMT on Sunday to market close on Friday. By extending trading hours, our members now have the opportunity to trade most of our currency, commodity and stocks overnight when trading was previously unavailable.
In addition, a 24-hour trading day is now offered by our partner StartOptions.com who offers real money trading.
If you have any questions, our customer service team will be happy to assist you. Please e-mail us at: support@tradesmarter.com
Sincerely,
TradeSmarter Team
TradeSmarter welcomes a new partner with a special Thanksgiving promotion
We hope you have enjoyed trading your demo account on TradeSmarter. If you’re interested in opening a real money account, register on Start
Options.com and you will receive a free $100 bonus on your first deposit.
StartOptions is a new binary options trading website that uses TradeSmarter’s platform that is open to everyone.
Start trading Forex ( FX) binary digital options
When an investor would like to place a forex binary option trading he would take under consideration the following factors:
- Trade time
- Spot price
- Strike price
- Forex (FX) binary option price valuation time
- Expiration time
Comparison of binary options premium pricing among binary options firms
It’s highly recommendable that the binary options trader will choose the firm he’s working with according to several parameters, one of them is the option premium collected by the binary options brokerage. Usually there are great variation in the premiums paid as this investment product is relatively new and not liquid as more mature investment products such as CFD’s and Spread Betting.
The difference between: In the Money, At the Money, and Out of the Money
While placing an option trading, the main focus of the forex trader is on the current price of the underlying asset, in our case the real-time spot price.
The spot price that also can be referred as the currency price is called at the money strike price.
The forex trader can purchase a binary option; the strike price will be one of the following:
In The Money (ITM)
As you already know, anything in the online trading reward is based on a gauge of risk and reward.
The trader has to choice a variety of strategies and risk and reward factors in order to match the best options strategy that will match his investment style and the risk level he’s willing to take.
Risk haters usually stick to in-the-money option positions while risk lovers are more attracted to out-of-the-money option positions. In case the trader purchased in-the-money option, the option will move in correlation with the underlying asset price (in our example the forex spot price). The main advantage of trading forex options in contrast to taking a fx spot position is that investor will pay only the premimum without any other risk, on the other hand the premium of in-the-money option is much higher
At The Money (ATM)
Describe when the options strike price is equal to the spot price, This will allow the investor to take a position which is really close to the market real price without paying the high premiums of In the money position.
Out the Money (OTM)
Trading out of the money options is extremely popular, the forex investor speculates on a scenario which is far from the real market price. The investor wishes for a sharp move that will cause his position will advance according to his prediction, to his strike price or hopefully will exceed his strike price and will become an in the money position.
Option Value vs. Time factor
By taking a forex option trade, the investor always see in his mind several dimensions that related to his predicted profitability and risk. The most important factors are:
1)The time factor-how much time is lest the option to expire
2)Volatility-which implicate the risk within the option position
The option is prices according to many factors which are reflected in the premium price.
The idea behind pricing options is so find cases in which an underlying asset is underpriced or overpriced because of factors that aren’t related to the market and can be used by the investor to take advantage to use this price arbitrage to make money as the market correlation is not systematic.
The Ins and Outs of Trying Out our Binary Options Full Demo Account
TradeSmarter is glad to announce that thousands of traders and investors have taken advantage of trading on our virtual platform. Many Investors have had the opportunity to become familiar with our product and our user-friendly platform, as well as testing and improving trading strategies.
Our virtual money account operates exactly the same as a real account, enabling you to have the full binary options trading experience without risking real money. On a virtual account you can buy CALL, or buy PUT and trade the same way you would in the real account. Also you have access to your trading history, as well as all the tools and features of our trading platform.
Whilst binary options trading might sound complex it is in fact very straight forward. We offer stock options, forex options and commodity options, all an investor has to do to trade is by simply choosing a direction of an option, as simple as Above (CALL) or Below (PUT). Once the option expires if the you chose the correct direction and settled ‘in the money’ your return will be 70-75%, if settles ‘out of the money’ you get 10% of your deposit returned.
So why spend your time with demo trading accounts? Why not just jump right into it if it’s so simplistic?
Well, as with all trading there is high risk involved, arguably the pre-determined exposure to each trade reduces the risk however starting with the virtual trading is still the sensible option. Capitalize on this a virtual safe opportunity to test trading strategies and try out different options that work best for you. It’s much safer to learn when there is no real money and no risk. However it is still important to always treat your virtual account as if it is a real account, therefore when it is time to jump into the water your ready!
Are you a trading rockstar? come and show the world the trader in you- TradeSmarter.com
Resources:
Perfect your options trades for free with virtual trading by Steve Sarnoff
TradeSmarter announces new back-office features to its binary options platform.
TradeSmarter announces the deployment of ‘two’ new back-office features to be added to its binary options trading platform.
1. Change of Theme capabilities (similar to wordpress plugin)
2. Retention and Alert functionality
Change of Theme – Our new feature makes it very straight forward to configure aspects of a sites ‘look and feel’ without needing to edit any code. Check out this screen shot of the options panel.
“Simple as changing a panel”
Retention & Alert Functionality – we have implemented a messaging function, enabling admin to send messages to end-users as a group or individually. For example “Hey Joe, we credited your account by $50 bonus”. This Retention Module helps site owner alert and notfiy users in real time.
Financial Gaming is coming to EiG? Look for Us!
Members of team are already in Copenhagen, European iGaming Congress and Expo (EIG), from September 15th until September 17th. We are going there for some meetings and will be happy to meet you there. Feel free to request time to meet by simply dropping us an email to adam@tradesmarter.com or contactus@tradesmarter.com
Short Video that explains what we do :)
TradeSmarter.com Launches a Binary Options Wiki
TradeSmarter.com launches today a comperhansive knowledge base that covers the binary options trading market.
Tradesmarter’s binary options wiki includes all the relveant information a trader should know in order to trade binary options sucessfully.
TradeSmarter.com is a technology and services provider of binary options trading solutions. TradeSmarter Binary Options Platform enables online traders to speculate easily on a wide range of instruments within the financial markets such as binary stock options, binary commodities options, binary forex options and binary indices options . TradeSmarter Solutions allow Partners to deploy sophisticated financial components within any new or existing online environment, customized with the look and feel of their own brand. Now platform is live at
TradeSmarter.com – click here to trade options
Binary Options Trading Strategies
Binary options empower the investor with a flexible trading tool that can help him react to any change happening in the market. There are five type of binaries which fall under the following categories:
Binary No Touch (also called “Lock Out”)
a binary option that gives an investor a payout at expiry only if the spot rate has NOT traded at or beyond the touch-barrier before expiry. Only two outcomes are possible with this type of option:
1. the barrier is breached and the investor collects the full payout agreed upon at theoutset of the contract
2. the barrier is not breached and the investor losses most of his initial investment
If a trader predicts that an underlying asset is about to bump into a strong resistance or support level,
than the one touch option let speculate that the price won’t fall below a certain support level or alternatively, manage to break out a certain resistance level.
This options trading strategy is usually deployed according to technical analysis assumption such as: Support and Resistance level, Fibonacci analysis etc.
Binary Double No Touch (also called “Range Binary” or “Double Lock Out”)
Is a binary option that pays the investor the predetermined payout at expiry if the price of
the underlying asset does not reach or surpass one of the two predetermined barrier levels.
Only two outcomes are possible with this type of binary option:
1. The barrier is breached and the investor collects the full payout agreed upon at the outset of the contract.
2. The barrier is not breached and the trader losing most of his initial investment.
This strategy is aimed to speculate whether an underlying asset predicted to move within a predetermined price range.
In comparison to Strangle options strategy, double no touch don’t exposed to theoretical, unlimited risk of a strong price action in the money.
The risk is limited and predetermined.
Example:
Let’s say the EUR/USD is traded now at the 1.4253 price level,
If you buy a daily ‘Double no touch’ option with 1.43 as the upside barrier level and 1.4205 as the downside barrier level and by the end of the day the EUR/USD moved in a narrow range of 1.4206-1.4252 then this ‘Double
no touch’ binary option will be ‘in-the-money’ paying the full predetermined payout to the trader.
Double One Touch
If a specific underlying asset is predicted to break out a specific price level, with no certainty of which di
rection it will be that the Double one touch strategy is used.
The double one touch binary option will provide the predetermined payout if an underlying asset broke out either one of the directions.
The double one touch often used to speculate a price breakout after a price consolidation or upon economic data release such as earnings reports or macro economic data.
Example:
Let’s say the EUR/USD is traded now at the 1.4253 price level, If you buy a daily ‘Double one touch’ binary option with 1.43 as the upside barrier level and 1.4205 as the downside barrier leveland by the end of the day the EUR/USD surpassed the 1.43 level, or alternatively breached the 1.4205 level than this binary option will be ‘in-the-money’ paying the full predetermined payout to the trader.The following illustration shows a double one touch binary that surpassed the high barrier with an uptrend breakout.
One-Touch Options (also called “Lock In” or “Touch Digital”)
The one-touch binary option gives an investor a predetermined payout once the price of the underlying as
set reaches or surpasses a predetermined price level.
There are two possible outcomes for the ‘one-touch’ binary option:
1) The predetermined price level is breached, the investor receive the payout agreed.
2) The price level is not breached and the investor losses some of his investment
When an underlying asset is expected to move sharply to a specific direction based on solid assumption than the ‘one touch’ binary option shall be used. When buying a one touch binary option, the trader anticipates either a breakout with taking under consideration the breakout strength,as the one touch options trading strategy will be in the money only if it ‘touched’ the predetermined price level.
Binary options (also called “Digital Options’)
Binary options are one of the simplest and inexpensive investment products out there.
If you believe that the EUR/USD will climb above the current price (1.4253 for example), at the end of the selected duration (within 1 day for example) that a binary option is a great choice for you, offering a predetermined reward and risk.
Hedging a Forex News Risk Event Using Binary Options
In the past few days I have been writing all about how excited I am about my Forex hedging strategies using Forex binary options. If you have read my previous posts on this blog, then by now you are familiar with how to hedge a breakout of a Forex instrument using binary options. But just to recap, binary options hedging offers a better alternative to traditional stop-losses. The reason they protect you better than stop-losses is that stop-losses lose money when they are hit and a binary option hedge does not.
Its that simple, The principal behind this is that binary option hedges shift the risk from below the breakout point to above it. The most attractive feature of this risk-shift is that trader momentum works in your favor above the breakout point. Have a look at my previous posts if this is not clear.
Today I will talk about another binary option hedging strategy. This strategy is similar to the strategy we have been discussing. The only difference is that the timing of both your Forex trade and your binary option hedge will be based on a a rally following a Forex news risk event, rather than a breakout of a resistance point.
In this example, today Great Britain released an important news data, the CPI y/y. Immediately after the news release, which attested to a better than expected rise in Great Britain’s CPI, the GBPUSD rallied as expected. Just after buying a long position on the GBPUSD, I placed a binary option hedge on www.Tradesmarter.com ’s binary option trading site. As in my previous posts about hedging, this hedge was a position opposite to the Forex position that I was holding, in other words a $100 PUT GBPUSD binary option trade. What this effectively achieved was to provide me with a $70 buffer zone below the breakout point. Anywhere within that buffer zone, within a $70 loss on my long Forex position, I would have been protected against a breakout failure without losing any money. A stop-loss, on the other hand, would have resulted in losses in case it was hit after a breakout failure or a shake-out (a minor test of the breakout point).
We have been talking about trader momentum as an important element in making this strategy successful. As you can see in the image and in examples in my previous posts, as long as the breakout failure is minor, selling momentum will be minor in my hedged buffer zone, just below the breakout point. As soon as the breakout re-occurs after testing the breakout point, trader buying momentum will work in our favor by quickly providing us the gains we need to cover the cost of the binary option hedge, $85.
In short, trader momentum works in a highly correlated nature with binary option hedging. This makes binary option hedging a more successful strategy for protecting against minor breakout failures than a traditional stop-loss.
Go to trade options
Hedging breakouts of the USDCHF and AUDUSD by using forex binary options
In my previous posts I outlined and gave examples of how to use binary options trading as a vehicle to hedge Forex trading. The links to these previous posts can be found below, and they are very useful if you still find this technique confusing, or if you just want to delve deeper into the theory. But just as a reminder, one of the many ways that binary options trading can be useful is as a hedging vehicle. Rather than use a traditional stop-loss to protect against loss, I have been using binary options. The reason that binary options can be more attractive than stop-losses, is that stop-losses are risky below the breakout point, assuming that’s where you are placing them, and generate losses when they are hit.
On the other hand, using a binary option hedge, which is simply a binary option position placed to win in the opposite direction of our Forex trade, we gain better protection than with stop-loss because if our Forex trade fails than our binary options wins, thus fully hedging our Forex position and ultimately leading to zero losses if our Forex trade fails. Thus the risk is shifted from below the breakout point, in the area between the breakout point and the stop-loss, to above the breakout point, in the area between the breakout point and the cost of the binary option. Again, have a look at my previous posts if this is still confusing.
Today I used binary option hedging to protect against breakout failure of the USDCHF and AUDUSD. As you can see in the image below, these instruments were in full swing today. As usual, within the hour after breakout both instruments tested their breakout points. While placing a traditional stop-loss may succeed if placed exactly right, it is nearly impossible to guess how far below a breakout point a test may descend, often shaking us out of our position before breaking out again shortly afterwards. This is where a binary option hedge is useful. Immediately after placing my Forex trades at the breakout points, I placed $100 binary option hedges (a trade of a binary option in the opposite direction of my Forex trade) on TradeSmarter.com’s binary option trading site. As a result, I was completely covered up to $70 of losses when the breakouts were tested. Had the breakouts truly failed I would have exited with zero losses thanks to the binary option wins, rather than losing money had I used traditional stop-losses. Since the breakouts succeeded after testing the breakout points, I became profitable as soon as I made more than $85 on my Forex positions ($85 is the amount lost when the binary option fails).
The strength of this hedging strategy relies on the properties of trader momentum. Since nearly all traders use stop-losses below the breakout points, a test of the breakout point is very risky below the breakout point when more and more stops get hit and selling momentum builds. The same is true after the breakout test, when the breakout occurs again. At this point most traders are aware that the breakout did not fail and re-enter with greater momentum. This helps us quickly recoop the $85 loss of the binary option. You can see this in the image provided, as well as in my previous posts using the GBPUSD.
In conclusion, by using binary option hedging we shift the risk from below the breakout to above. This allows us to take advantage of trader momentum which works against us when using a stop-loss and works for us when using binary option hedging.
For more information on how this works see
http://tradesmarter.com/2009/06/hedging-a-breakout-of-the-gbpusd-using-binary-options-trading/
and
http://tradesmarter.com/2009/06/trading-binary-options-as-a-hedging-strategy-for-forex-trading/
Go to trade options
Hedging a Breakout of the GBP/USD Using Binary Options Trading
Today as expected, the GBPUSD ended its fantastic five day up swing (see image below, left side). The end of the swing was marked by a reversal during European market hours, shortly after 8AM GMT. The reversal was marked by a breakout at the 1.65150 resistance line. As usual the breakout was tested less than an hour later. At that point, the GBPUSD rose just above the breakout point, reaching 1.65185. This slight failure of the breakout point was enough to shake out those of us Forex traders that place a tight stop-loss just below (above in this case of a short) the breakout point.
We all know how much it stings when a very minor breakout failure denies us a huge payday. Indeed, those of you who placed a wider stop-loss raked in huge profits all the way down to 1.63555. So the question that always returns to our mind is, ‘What to do- set tight stops and get shaken out or set wide stops with greater risks?’
In my last article I explained how to resolve this risk conflict using binary options hedging (the link is provided below). Today would have been a great opportunity to use this strategy. At the same time that I shorted the GBPUSD at 1.65150, I placed a CALL binary option trade on the GBPUSD. Since the payout model at tradesmarter’s binary option trading website returns a 70% payout, this meant that my $100 CALL binary option effectively hedged my GBPUSD short trade and kept me profitable even when the breakout failed. In fact, I was hedged all the way up to 1.65250 without placing any stop-losses. As expected, the breakout failed only slightly and then brokeout again with much more momentum. My hedge cost me $85 because the success of the breakout caused my CALL binary option to fail. However it did its job since the profit on the GBPUSD was much greater, as you can see in the chart attached.
The conclusion, as you can see, is that binary option hedging can usually offer us a more successful alternative than placing traditional stop-losses. Thanks to moderate breakout tests, followed by trader momentum, we can shift our risk from below (in this case above, because its a short) the breakout point to above it (in this case below it). For a quick explanation of how this works see see http://tradesmarter.com/2009/06/trading-binary-options-as-a-hedging-strategy-for-forex-trading/ .
Trade Binary Options as a Hedging Strategy for Forex Trading
Forex traders often encounter failure of their strategies in the dreaded stop-loss zone. This zone, adjacent to the breakout point, is the fuzzy area where we Forex traders often place stops to protect ourselves from further losses. Each Forex trader who trade options uses different rules for his stop loss point. Usually this is slightly above or below the breakout point. But as we have all experienced, the problem is that a breakout often tests the breakout price, sometimes dropping slightly below the breakout price, ’shaking us out’ of our trade. Therefore the stop-loss point becomes fuzzy, forcing us to choose lower and lower stop-loss points, and wearing us out each time we re-enter the same breakout point.
Trade Binary Options using Binary Hedging Strategy
One attractive possibility is to hedge our Forex trade using a binary option hedge. This is actually much simpler than it sounds. What it actually does is shift our risk from the stop-loss zone to the area above the breakout point, where the prices are more likely to rise and where the breakout is less likely to fail due to the properties of trader momentum.
- Here we outline one such hedging strategy, using binary options trading to hedge against our Forex trades.
In this example, i place a trade of 1 mini lot EURUSD long, when its price crosses my breakout point of $1.00. Should the EURUSD test my breakout point before i exit this trade, i will place a $100 PUT binary option trade. What this does is shift my original breakout point lower, similar to a stop-loss, such that i am profitable as long as a test of the original EURUSD breakout point does not leave my Forex account with greater than a $70 loss. If I incur more than a $70 loss in my Forex account, then I immediately exit the EURUSD position.
- This has effectively shifted the risk of breakout failure from the below the breakout point to above the breakout point. The attractive feature of this hedging strategy is that most breakouts are often tested slightly the below breakout point. Using this hedging strategy we protect ourselves in the area below the breakout point rather then get worn out using a stop-loss that is lower than the breakout point, which is the common Forex trader practice. And the best part of this strategy is that the risk has been shifted to the area above the breakout point (our Forex trade must make at least $85 profit in order to cover the binary option loss). However we know that as long as the breakout has not failed, we will more than likely cover this hedge. Remember, the breakout is most likely to fail BELOW the breakout point, but now we are covered.
About the author: Jack Major is currently the Chief Risk Management Office of TradeSmarter.com, managing Risk and Strategies for all major market instruments. Previous to TradeSmarter, Jack was a senior consultant for many years for PricewaterhouseCoopers Global Risk Management Solutions division.
Come Meet us at the Amsterdam Affiliate Conference
Come Meet us at the Amsterdam Affiliate Conference (29/4-3/5). If you want set up a meeting or see our binary options platform (live demo) – send us an email to contactus@tradesmarter.com
iGaming Business is thrilled to announce the latest city to host one of our world-famous online gaming affiliate conferences: Introducing the newly re-named Amsterdam Affiliate Conference! — Previously titled CAP Euro: Amsterdam.
The Amsterdam Affiliate Conference (AAC) has opened its admission policy to encourage new affiliate attendees by opening its doors to all iGaming affiliates, eliminating requirements of CAP Forum membership as a prerequisite for free attendance. Likewise, all affiliate programs will be charged the same low rate to exhibit and attend, regardless of their certification membership. Extending its open door policy, AAC invites affiliate forums, affiliate portals and affiliate organizations to join the show.
Financial Gaming: The Evolution of the gaming industry
Financial Gaming Overview
The evolution: Game of chance -> Skill Games -> Financial Betting aka financial gaming – >binary options.
Here are a few of my own thoughts on the evolving financial betting market and the use of binary options. Our current economic environment has given birth to countless new financial gaming sites. Following on from this, a new segment of financial markets has been born.
Online Financial Gaming Background:
Online gaming is a fast-growing industry. Online gaming gross yields are expected to reach $20 Billion by 2010. Initial online gaming activity began with Online Casino operators, who used digit generators to provide games of chance to the player, but online gaming has since evolved. Now players can play skill-based games against each other on international financial markets and also benefit through payoffs which are determined by movements in various financial instruments. Increasingly, we are seeing the emergence of financial gaming as a new, distinct segment in this market.
Binary Options
From five minute NASDAQ bets offered by online bookmakers to hourly Forex bets traded around the clock, binary options are the latest craze to hit the gaming industry in a new form called “Financial Gaming”. Just like spread betting, binary betting allows you to take a view on whether a market is going to go up or down. The key difference and advantage is that from the outset you know your maximum loss and maximum gain. Binary options tend to be very short-term investment products, and most typically expire during a given trading period.
With such a simplified product, you can bet on movements in an ever-widening range of assets: Individual shares, equity indices, commodities and exchange rates. This simplified approach provides a new and exciting way to trade across the financial markets.
Why trade binary options?
The financial gaming segment is attractive for the gaming industry because:
• The player’s high level of interest in financial markets due to current economic uncertainty
• It utilizes a unique mix of entertainment, skill and knowledge from the player
• Any financial loss is known and limited, unlike in Forex or other leveraged trading
• Financial gaming is culturally accepted more that typical online gaming products
• There are high levels of profitability for the player.
Financial gaming involves prediction on real markets and real events that are happening in real life and all can be valued at some point (at expiry); as opposed to game of chance that is based on randomly-generated numbers.
• Games of Chance: A game of chance is a game whose outcome is strongly influenced by some randomizing device and upon which contestants frequently wager money. Devices used include dice, playing cards, roulette wheels or numbered balls drawn from a container.
• Skill Games: Skill-based games allow users to compete for money however their outcomes are based on skill rather than chance.
• Financial Gaming also called Financial Betting Odds: refers to the wagering on the price development of a financial instrument at some later date relative to the current price or level of the instrument, against odds offered by a bookmaker.
This analysis brought to you by: Yoni Avital, Chief Executive Officer of TradeSmarter Holdings, a software developer to the global Internet financial trading / gaming market, has developed proprietary binary trading platform with unique algorithms and architecture which allows partners easy integration for both technology licensing and white label solutions.
Refrences:
Binary Options book by Hamish Raw
Wiki – Binary Options Trading
What are one hour Binary Options?
One hour option term came about as traders and investors worldwide strove for new, simplified ways to trade across the financial markets. One Hour Binary options are a cross between traditional buy-and-sell options and those of fixed returns. However, do not be overwhelmed by this new system; more and more financial traders are finding it the most simple, ‘straight up’ and enjoyable way to get the best out of online trading.
Trading Binaries- How does it work?
Binary options or digital options, can have only one of two possible outcomes. When trading binary options we only have to ask ourselves two questions. First, what is the current rate of currency we are analyzing? Second, can we expect the rate to be higher or lower in a fixed time from now? For example, imagine you are a trader who is willing to risk $100 on the idea that Euro/Dollar’s exchange rate will increase in one hour from now. If your prediction is correct and the fixed return rate is 70% you will receive $170. If incorrect and your binary option decreases below the strike price, you will lose your initial investment and receive nothing. The term ‘binary’ thus suited this all-or-nothing type of trading. You should now be starting to realise why binary options are fast becoming the simplest way to trade the markets and are yielding large profits for online traders. But here are a few more factors to help you:
Benefits of trading hourly binary options
1. Controlled Risk – The percentage reward is known from the outset, as is what the player stands to lose i.e the exact amount they placed.
2. Easier, simpler – The player only needs a sense of direction i.e. ‘Will the exchange rate increase/decrease in half an hour?’
3. “In the money” – For a profitable trade to take place there is a need for price to close in-the-money, a winning trade will receive the entire payoff, even if was ‘right’ by a single tick.
4. Protection – A safer option to take if a trader has an open position elsewhere in currency, stocks etc. Utilizing a binary option can eliminate a further loss elsewhere.
5. Punctuality – Binary contracts are being issued around the clock, allowing traders to trade on multiple time frames. There is always an expiration time arriving, which constantly yields new opportunities for binary traders.
Select Direction:
1. “Call Option” – Select call if you believe that the instrument will close above the current price
2. “Put Option” – Select put if you believe that the instrument will close below the current price
3. Select Investment amount
Example:
hourly option
Digital Option Calculation
The cash-or-nothing digital option provides a fixed payout of M when the price of the underlying instrument S ends up above (in the case of a “call”) or below (in the case of a “put”) the strike price K.
Binary option formula
This can be visualized as follows, with the height of the horizontal bar equivalent to the payoff M:
One hour Digital option
White-Labeling of binary options products and why network based companies such as Tradesmarter, St Minver and Ning are ideal fit for online brands nowadays
The recession is here and online brands are engaged in a race to generate more products but with limited funds. Here I want to explain how white-labeling ( can be viewed also as super affiliates) can pump revenues of existing online brands and provide a light at the end of today’s economically-recessed tunnel.
What is the White-Label approach?
The term ‘White-Label’ was formed decades ago to describe a product or service that was produced by one company but then re-branded by other companies to make it appear as if they had produced it. Supermarket ‘own’ products for example are supplied by manufacturers that supply the same products to multiple supermarkets, changing only the labels. Websites use white labels to allow a successful brand to offer a service without having to invest in creating the technology and infrastructure itself.
From advertising to HR, the Internet is shifting towards this performance-based model. Why spend valuable resources when you can cut time and costs and create a win-win situation with exciting solution providers?
The benefits of using White-Label solutions are:
• A wider client base via engagement of the partners clients
• A better service to your client base
• Avoids investment in new infrastructure
Success Stories:
There are many success stories of leading media brands who entered new arenas by using existing network operators to host their sites.
A great example of white labeling is the St.Minver – Yahoo! partnership, which gave way to one of the biggest gaming sites in Europe. In 2007 Yahoo! UK decided to enter the growing poker segment and made a white-label partnership with St.Minver. Each side brought to the table what they did best; St.Minver managed the operations and infrastructure of the site while Yahoo! brought its large client base. Many online brands have done the same and integrated existing gaming network products into their online offering.
Ning.com is another great example. The Ning platform allows companies to open their own social networks for employees. Advertising is implanted into their users social networks and funds Ning revenue, while users and customers are getting a great social product free of charge. Ning has become a tremendous success and predicts that by 2010 it will host some 4 million social networks, with tens of millions of members, serving up billions of page views daily.
Affiliates & White-label Binary options Opportunity
Opportunities lay in new markets – Binary Options are latest craze in financial, as the most simplified and fun trading product out there. Binary trading offering is extremely appealing to both traders and newcomers.
* New Vertical - Window of opportunity to tap into this attractive segment.
* Simple Product – Easy to explain product with high conversion rates.
* Creative Art – We provide you with exciting marketing campaign.
TradeSmarter’s White-Label Solution
TradeSmarters vision can therefore be seen in a similar light to that of St.Minver. While we will offer out our trading platform and manage all the complex end-to-end services and operational aspects, our partners will bring their client base and marketing expertise. Think of the ultimate affiliate program for Binary Options affiliates offered right now, Not only we welcome you to tap into this attractive segment but also let you have a customizes site with your own look and feel. See one of our clients StartOptions.com
What we are bringing to the table:
• All Infrastructure including multilingual Binary Options Platform
• Risk Management
• Billing, Fraud detection and Multi-Currency payments
• Feeds/Charts
• Technical Support
This win-win formula will establish long-term, meaningful and profitable partnerships.
Tradesmarter White-Label Solution
http://tradesmarter.com/solutions/white-label
Binary Options Affiliates Program
Resources
St. Minver:
http://www.stminverltd.com
Yahoo! UKPoker:
http://uk.poker.games.yahoo.net/yahoopoker/poker/home/index.html
Ning
http://www.ning.com
What are binary options (digital options)?
The post moved to>
http://tradesmarter.com/2009/03/what-are-binary-options/
Welcome to Tradesmarter Blog!
Welcome to TradeSmarter.com Blog!
From time to time we will post different observations, survey and analysis made by us and would be happy to hear your comments.
In the meanwhile take a look at Limmasol (Cyprus) view – out from the office window 
TradeSmarter Team
