“To be, or not to be: that is the question…”
……..binary options ultimate choice?
From Elizabethan England’s Shakespeare to the Swingin’ Sixties’ Small Faces and their classic 45 “All or Nothing”, the polarisation of decision making into two choices has attracted the attention of the greatest playwright and blues/rock singer. More recently the financial markets have focussed on the yes/no, black/white paradigm and have come up with their own version, the binary option.
Binaryoptions.com has been set up by Hamish Raw, an options trader, options risk management consultant and binary options enthusiast. The site’s main purpose is to educate financial market operators on the flexibility and potency of these relatively unknown ‘all or nothing’ options. The challenge will be to turn it into the main forum for traders, analysts, academics and researchers, tipsters and students with a professional or passing interest in these limited risk, flexible and intuitive instruments. Contributors will be most welcome.
As Easy As 01, 10, 11!
RRP: £65, Buy here: £40
Why have binary options become so popular since 2008? The answer must be simplicity. There are numerous internet-based binary options platforms now championing these all-or-nothing instruments on their ease of understanding, but also on the very quick, limited risk high return.
At any one time the most fundamental instruments of the binary options stable, vanilla calls and puts, when at-the-money provide a 50:50 chance of winning if one believes in efficient markets. Clearly there is a vast global population who do not believe in efficient markets as they are happy to speculate on markets. For those in need of the quick buzz, who do not want to get involved in more complex trading such as spreadbetting and CFDs, binary options provides the perfect limited risk solution.
The Root of all Financial Instruments:
Binaries turn up in all walks of life and just as binary code is the root of all software languages, so binary options can be considered the basis on which all other financial instruments including futures, conventional options, convertibles, CFDs etc. are structured. Indeed any financial instrument can be dismantled into its individual component parts of binary options.
Financials, Insurance & Sport
“What’s in a name? That which we call a rose
By any other name would smell as sweet.”
Binary options in most respects is the terminology used for trading the probability of an event happening in financial and commodity markets. In sport the trading of probability is referred to as fixed odds betting, while in the catastrophe insurance market the terminology is an Industry Loss Warranty (ILW).
Binary Options Strategies
The section on Strategies provides descriptive analysis of a wide range of different binary strategies, many of which will be new to the reader. The section is broken down to the following headings: 1. European 2. One-Touch 3. Knock-Outs 4. Knock-Ins and 5. Two-Asset.
Binary Options Greeks
The Greeks are the options sensitivity analysis. Analysed are the call delta, put delta, call theta, put theta, call vega and put vega. The delta measures the change in price of the binary option to changes in the underlying price, the theta measures the change in the option owing to the passing of time and the vega measures the change in the option price owing to a change in implied volatility. Also covered is the binary option gamma which measures the change of the delta with respect to a change in the underlying.
Articles
This section on articles provides some ad hoc observations on the binary options marketplace.
Binary Options Group
Binary Options Bookshop
The Bookshop has relevant books not only on binary options, but other financial topics including conventional options, spread betting, contract for differences (CFD), etc……….
Consultancy
Hamish Raw has an abundance of hands on experience in derivatives pricing and risk management, but especially in the options (both conventional and as well as binary) arena. He is available to hire for general consultancy on an international basis.
