
Nicholas Dockerty asked: Financial binary bets are simple ‘yes/no’ propositions that allow you to take a position on the financial markets over a fixed and a relatively short period of time. The provider will give you a two-way price and ask whether you think that ‘yes’ the price will end up higher (you buy) or ‘no’ it will be lower (you sell) at the specified time from this point.
For example, say you were wanting to place a binary bet on the direction of the FTSE 100 index over a 20-minute period. It has been a volatile day on the UK’s indices and at this point it’s difficult to call it either way. The provider would offer you a price, say 48-52, so if you thought the price was likely to end up higher after 20 minutes from this point you would ‘buy’ at 52 and if you thought it likely to fall you would ‘sell’ at 48.
It’s important to note that all binary bets have only two possible outcomes: they either settle at 0 or 100, which makes them a limited risk bet.
It’s up to you how much you stake per point of course. So, in this example you decide that ?5 per point is how much you can afford to risk, and decide that the FTSE will fall. If your judgement is correct you would win 48 x ?5 = ?240 (the difference between 48 and 0), similarly, if incorrect you would lose 48 x ?5 = ?240 (the difference between 52 and 100).
Binary bets have a broad appeal; their relative simplicity appeals to newcomers to financial spread betting while the quick and exciting nature of binary bets also appeals to more experienced spread bettors.
Binary spread betting can be one of the simplest and most accessible ways of taking your position in the global markets. The range of markets you can choose from is extensive including indices, commodities and forex.
More information…It is important to note that financial spread betting can result in losses that exceed your initial deposit, so please make sure you understand the risks involved.
Marvin