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  1. #1
    Administrator Martin Kay's Avatar

    The Great Binary Options Glossary by Bots.com !!!

    Hi, guys! BinaryOptionsThatSuck.com team is proud to present the Great Glossary of Binary Options. It covers all the different Binary Options, Financial and Fundamental Terms, including short explanation for newbies. This glossary will be extremely usefull for newbie traders and a starting point for the jungle of the market and trading terms!

  2. #2
    Master Member vinayakm's Avatar

    This is good !!!

    Quote Originally Posted by Martin Kay View Post
    Hi, guys! BinaryOptionsThatSuck.com team is proud to present the Great Glossary of Binary Options. It covers all the different Binary Options, Financial and Fundamental Terms, including short explanation for newbies. This glossary will be extremely usefull for newbie traders and a starting point for the jungle of the market and trading terms!
    It's good to have a glossary, but I didn't expect it to be so short! I usually google unknown terms, anyway.

  3. #3
    Master Member Bogdan G's Avatar
    Quote Originally Posted by vinayakm View Post
    It's good to have a glossary, but I didn't expect it to be so short! I usually google unknown terms, anyway.
    Lol, did you find anywhere else a longer glossary? One that doesn't turn into a dictionary or an encyclopedia, that is.

  4. #4
    M.J
    M.J is offline
    Veteran Member M.J's Avatar
    hmm Pretty big glossary. Not only binary but financial terms r also covered.
    Please include the term Straddle under Binary option terms. It is a strategy where trader is expecting movement but dun know the direction. So he places both call and put with same strike price and same expiry.

  5. #5
    Master Member Bogdan G's Avatar
    Quote Originally Posted by M.J View Post
    hmm Pretty big glossary. Not only binary but financial terms r also covered.
    Please include the term Straddle under Binary option terms. It is a strategy where trader is expecting movement but dun know the direction. So he places both call and put with same strike price and same expiry.
    M.J, I know what a Straddle is, but I really don't see how you can apply it to Binary Options trading.......If you find a way, explain it to me too.

  6. #6
    M.J
    M.J is offline
    Veteran Member M.J's Avatar
    Quote Originally Posted by Bogdan G View Post
    M.J, I know what a Straddle is, but I really don't see how you can apply it to Binary Options trading.......If you find a way, explain it to me too.
    Strategy is explained here.
    http://www.binaryoptionsthatsuck.com...rategy-review/
    Well, placing a put and call on the same asset with same expiry will actually be straddle strategy. So why it cant be in binary options?

  7. #7
    Master Member Bogdan G's Avatar
    Ok, I will try to explain:
    I have 80% payout on both call and put, right? OK. Lets assume for the sake of the example that I invested $100 on each trade.
    On one option I lose the full investment. You agree that one option will expire worthless, right? This means I lost $100.
    On the other one I win the full payout of 80% which is $80 profit
    The status of my "Straddle":

    -$100 from the first trade
    +$80 from the second trade
    Result: -$20
    The conclusion: Do not use a straddle on binary options unless you want to lose money.

    A straddle is an extremely powerful strategy when it is used for VANILLA OPTIONS (and other types, but not Binary). Hope I explained it good enough
    Have a great weekend, my friend
    Last edited by Bogdan G; 12-14-2012 at 06:44 PM.

  8. #8
    M.J
    M.J is offline
    Veteran Member M.J's Avatar
    You r correct if we use straddle the way u said. But there r profitable ways of using straddle.

    Consider following example
    Click image for larger version. 

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    If Expiry is set at "Expiry 1" or "Expiry 3" then u r correct that he will make some loss which will be $20 if we take prices from r example.
    But if Expiry is set at "Expiry 2", it will be $160 profit which is 8 times the loss. So 1 win out of 8 trades will breakeven.

    But again, this strategy is not as simple as it looks in my example. You need to be clever and hope that market moves sideways.

  9. #9
    Junior Member
    There is no such thing as a straddle with binaries, because the spreads would cause the strategy to cost more than 100 and win 100, if long, or to get less than 100 and cost 100, if short. Except for the vanilla options, the only exotic , though non-binary option where straddle can have a meaning would be the lookback option. However nobody offers lookback options.

    The picture above depicts a strategy that has two exercise prices, thus it's similar to a strangle, not to a straddle. It would be a strangle if both options would have a common expiry.

    Later edit: changed "callback" into "lookback". I knew something, but didnt remember well

    A lookback option is similar to a vanilla, but the difference is that the market never goes against you. Every won pip remains won, even if the market changes direction. This is why these options are bloody expensive.
    Last edited by fxeconomist; 12-18-2012 at 10:51 AM.

  10. #10
    M.J
    M.J is offline
    Veteran Member M.J's Avatar
    Quote Originally Posted by fxeconomist View Post
    There is no such thing as a straddle with binaries, because the spreads would cause the strategy to cost more than 100 and win 100, if long, or to get less than 100 and cost 100, if short. Except for the vanilla options, the only exotic , though non-binary option where straddle can have a meaning would be the callback option. However nobody offers callback options.

    The picture above depicts a strategy that has two exercise prices, thus it's similar to a strangle, not to a straddle. It would be a strangle if both options would have a common expiry.
    hmmm, yes I think I mixed strangle and straddle. It is true that if we keep strike price and expiry same then there is no way to win in binaries.

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