Just wondering if any of you have tried options trading?
Old thread. Possibly dead?
I’ve dabbled in binaries over the past little while. Any specific questions you had?
when I asked that, I had read something about it and it seemed interesting. Since then I learned more about it but moved on to other things. I wonder if my daily high low would lend itself to binary trading. For shorts, I know when price is at it’s high for the day (approximately) so I know with high probability that price will be lower than that sometime tomorrow and vice versa for longs. That makes for a high percentage of wins and good profits when you don’t make the mistake of adding in new positions to a loosing trade. This method can also have some largish drawdown at times when you don’t get in close enough to the high or low. But just knowing future direction may lend itself to some kind of binary trade because you know ahead of time if price is going to be higher or lower than it is now, you just don’t know exactly when or by how much.
Things that make you go hmmmm…
Yeah, somebody might want to test that or something…
Hello TalonD.
I started a thread some time back on the subject of Binary Options. I do believe that anybody that is any good at analysing a short term chart (anything from one hour and below) SHOULD, in theory, be able to make money out of them especially given that there are many TYPES of Binary Options (I’m not sure if it’s Binary Options you’re talking about or ‘proper’ options). I’ve demo tested them at various Binary Options Brokers but it’s their charts and the actual brokers THEMSELVES that worry me to be honest i.e. none of them, other than the CME of course, appear to be ‘legit’ (or at least that’s the impression that I got during my testing phase). Put it this way: MORE than once, as but one example, did I have a Binary Option that HAD THE OPTION CLOSED ON TIME it would have expired ‘in the money’ but all of the brokers that I tested did the same thing i.e. they would leave the option open for at least 45 seconds after it SHOULD have closed and, well, it just seemed odd to me that invariably the options expired ‘out of the money’ because of this 45 minute delay normally by only a ‘spurious tick’ or two. And that was on DEMO accounts so I’d be rather suspect when it came to a LIVE account i.e. one would at least THINK that if anything the DEMO accounts would work ‘perfectly’ to attract new (hopeful) traders not so (and only THEN ‘fuk’ with the LIVE accounts)!!! LOL!!! Put it another way: I don’t see any difference between trading Binary Options and trading ‘normally’ on the same timeframe??? Well not if you’re trading ‘One Touch Binary Options’ anyway i.e. price just has to ‘touch’ a certain level on that timeframe for the option to expire ‘in the money’. That’s the same thing as trading ‘normally’ with a TP in place is it not??? Of course one NICE Binary Option option (no pun intended) is the fact that you can also trade a ‘No Touch Option’ i.e. in other words, and in order for the option to expire ‘in the money’, you’re ‘betting’ (for want of a better description) that the instrument will trade in a certain range during the given timeframe and NOT touch the upper and lower price limit of the option. This is NOT something that you can do trading ‘normally’. But as I said: it’s the Binary Option BROKERS that worry me. As a matter of fact: when questioned WHY the options were not being closed EXACTLY on time I never received one response from any one of them so make of that what you will. I even remember having an argument with one of them e.g. if you were an IB for them (and some of them pay very high commissions I must say which is ALSO something to bear in mind and make you wonder) you’d have some pretty 'pised off’ clients if their Binary Option WOULD have expired ‘in the money’ if trading HAD closed ON TIME but because of the delay in closing, and the ‘odd spurious tick’ to cause the Binary Option to expire ‘worthless’ their option expired ‘worthless’!!! Not something I personally would like to have to ‘field’. Needless to say: after making the broker aware of exactly the above I never heard a word from them again either!!!
Regards,
Dale.
I had TheZingThing runn me through a basic intro of options, and sort-of liked the concept (its also more trading than betting). But we couldn’t get a demo-place for it. Is there somewhere to demo-trade options? Is there a learn-it-yourself place for options and futures like in BP for forex?
There must be sites dedicated to options (Binary or other). I know that ThinkOrSwim (TOS) (I think they’re called) offer options and if I’m not mistaken a demo account as well. I don’t know too much about options though EVEN although a good friend of mine has FOR YEARS been trying to get me interested in them. I just don’t seem to able to grasp the concept really (well other than Binary Options which really don’t require much ‘brain power’ to understand)!!! LOL!!! Although, and if I’m not mistaken, a Binary Option is ACTUALLY nothing different from what is called a ‘Vanilla Option’ in normal options trading (but I COULD be wrong on this).
Regards,
Dale.
Hi,
Well interestingly enough it would appear that on 22 May 2011 and ‘outfit’ called ‘DailyForex’ sent an email to one of my old email addresses that I don’t check very regularly (mostly all spam ends up there) but I thought this information and the links (related to Binary Options that is) may be of interest to some:
DailyForex Newsletter | May 22nd, 2011
Everything from Binary Options Broker Reviews to ‘what are Binary Options’ and how to use them (just follow the links on the pages) is covered.
Just how much of it is ‘advertising hype’ and how much of it is ‘the real deal’ I cannot say. And, given my ‘take’ on these things, I’m not even sure I should be ‘aiding and abetting’ the dissemination such information but hey: for all I know they COULD be viable for those having problems trading spot FOREX (the ‘impatient type’ that is)!!! LOL!!! I also have to admit that one or two of the ‘hedging’ ideas appear to be logical (if nothing else).
Anyway: I guess the bottom line is that if some people are able to make money trading them, well, ‘kudos’ to them and I couldn’t be happier for them and I guess that’s why we’re all here i.e. to help each other make money so maybe these things will ‘float your boat’ and who am I to say that it’s only MY way to trade to be profitable!!! LOL!!!
Beware though: at least two of those Binary Options Brokers that are reviewed are the brokers I had the ‘issues’ with as described in one of my previous posts on this thread. Maybe things have changed since then (since last year or the year before) but if anybody decides to give these things a ‘bash’ I would STRONGLY suggest that you look for some sites or forums on the subject and try to find some independent reviews from other Binary Options Traders!!!
Regards,
Dale.
In my humble opinion, binary options are pure gambling. I hesitate to say this since I know some people using them to make decent money, but the odds are stacked against you.
If you are “in the money” - Average payout is 70-85%
If you are “out of the money” - Average payout is 1-3%
You can’t stack odds in your favor here, as you must be right much more than you are wrong to be profitable.
You are also locked out of the trades. For example, you bet the AUDUSD is going to fall below 1.05 in the next hour, suddenly there is a huge engulfing candlestick the next 15 minutes only 5 pips above your entry. Too bad, you’re locked out of the trade.
Normal options, as offered through Alpari FX options etc. are for more serious traders and make more sense. This is because you can manage the risk. For example, you could buy a weekly vanilla put at 1.07 and within two days made over 250% on your original investment with draw downs fluctuating between 30-70% (this is just an example that is very loose in representation).
Don’t waste your time on Binaries, they are hype and they will eventually fall into the scam category as people catch onto it.
They are also illegal in the U.S. and even clients in the U.S. working with outside entities is considered illegal, but because the chop shops are running so rampant, it’s hardly regulated.
Hi,
Unfortunately, and based on my demo testing of these things a year or two ago, I have to agree with you. I didn’t know they were illegal in the US. That’s interesting to say the least and there’s obviously a very good reason for that!!! Having said that: I’m ALMOST SURE (actually I must check on this before I myself am giving out misleading information) that when I was looking into these things the CME offered Binary Options BUT I ALSO seem to remember that you were not limited to this five-minute or fifteen-minute ‘cr*p’ with ‘gauranteed payouts’ (but let me check on this before I go any further with this).
Regards,
Dale.
Binaries are a huge load of crap I’m afraid. Overrated piece of…
Hang on, they can’t be illegal in the US, I’m sure I’ve seen american brokers offer this, no?
Alright well evidently I still have some brain cells (memory) intact!!! LOL!!!
Take a look at this link: http://www.cmegroup.com/company/history/magazine/pdf/cmemagazine_1205.pdf
Unfortunately it is a rather large Adobe PDF file (and dated 2005 so I don’t know if things have changed since then) but this was a publication from the Chicago Mercantile Exchange so (and, as I say, unless things have changed since then) I don’t see how they can be illegal in the US. See pages 24 and 25 of the Adobe PDF file.
Unfortunately: I myself don’t understand options AT ALL so I have no idea whether we’re ‘comparing apples with apples’ here.
The above being said though: what’s apparent (I THINK anyway) from the document is the fact the CLIENTS (buyer and seller) determines the strike price etc. unlike with this other ‘bunch’ of Binary (Digitial) Options Brokers where the strike prices are pre-determined by the broker. Maybe THEREIN lies the difference??? Not sure.
Regards,
Dale.
It’s speculated that 70%(ish) of binary options expire worthless. I would consider this to be very much true. However, it’s been noted -thanks to the quarterly profitable accounts reports of brokerage institutions- that on average, 30%(ish) or less of all retail currency speculation accounts are profitable on a consistent basis.
only 30% of binary trades are profitable; only 30% of currency traders are profitable.
If binaries are garbage because it’s so hard to turn a profit, then the same must be said for ‘standard’ trading vehicles…
Hi,
Also: interesting statistics. The only thing that I wonder about though is this: if a trader (let’s call them a ‘directional trader’ or a trend trader) was using Binary Options to minimize risk on their ‘directional’ trades (you know: using the Binary Option as ‘insurance’ against a big move against their ‘directional’ position) then of course the Binary Option would expire worthless BUT the ‘directional’ trade may have been highly profitable (as I understand it anyway)???
Don’t get me wrong: I’m (once again) by no means advocating these things as legitimate trading vehicles (well: especially not at the brokers that ‘hype’ the possible returns and use a ‘good looking skirt’ to get me to open an account) but just wondering is all.
And for all I know: we could be TOTALLY off-topic here i.e. TalonD was asking about FOREX Options (I’m the one that’s ‘guilty’ of introducing Binary Options ‘into the mix’ on this thread)!!! LOL!!!
Regards,
Dale.
Even if it were debated that you can make money with them, there are still two very big reasons they are not legitimate for a serious trader with size or someone who wants to trade for a living.
1 - They are not regulated and are illegal in the U.S. Not being regulated (except for a select few outside of the U.S.) means that your money is not guaranteed by a bank. AKA your money is not safe.
2 - You are locked out of the trade, if something happens, for example an earthquake, a terrorist attack, a sudden news announcement, a “rumor,” or a simple turn in price, you cannot drop your positions. You will lose and cannot manage risk.