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The binary bet is a radical new concept in financial and
sports betting. Combining the best features of spread betting and
traditional fixed-odds, continuous two-way betting prices on
specific events, such as the FTSE to reach a certain level at the close of
trading. All bets settle at either
0 or 100 depending on whether the event
occurs or not.
- Maximise your profit in the minimum time
- Strictly limited risk
- Early bet closure possible
Your potential return and level of risk are both fixed when you place your
bet, but you also have the freedom to close your bet out at any point
before full term, to cut losses or lock in profits. The binary bet also
gives you an exciting opportunity to bet 'in running', as our prices are
extremely sensitive to shifts in the underlying markets.
To see how binary bets work in practice please look at our
examples.
Example: Financial
It is 4.17pm, and the FTSE 100 index currently stands 11.6 points higher
than the previous afternoon's official closing level. You are not
confident that the FTSE will be able to hold on to the day's gains, and
see that our price on the FTSE finishing down by 0 to 10 index points is 6.6
- 9.2.
You decide to 'Buy' the FTSE 0/-10 binary for £20 at 9.2.
At this point you know your maximum potential loss: if you are wrong and
the binary makes up at 0 you will lose 9.2 x £20 = £184. You also know
that your maximum return on the bet will be (100 - 9.2) x £20 = £1816.
So your bet equates roughly to a £184 fixed odds bet at 10/1.
Eight minutes later, the FTSE has dropped back slightly to 2.4 down
on the day, and our quote for the FTSE 0/-10 binary has risen by over 40
points. You think there may be some more market shifts to come, and decide
to take your profit now. You close out your bet at our current Sell price
of 48.8.
Your profit on the bet is:
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Profit |
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Closing level |
48.8 |
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Opening level |
9.2 |
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| Difference |
39.6 |
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= 39.6 x £20 = £792 |
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You were right to be concerned, as the FTSE returns to positive territory
in the final minutes of trading, closing 6 points up.
The FTSE 0/+10 bet settles at 100 while all remaining binary bets in this
package (including the FTSE 0/-10 bet that you had placed) settle at 0.
The good news is that by closing your bet early you guaranteed yourself a
healthy profit, instead of the loss that you would have suffered if you'd
left the bet alone.
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