Читать книгу Binary Options - Hamish Raw - Страница 6

An upbet can only win or lose at the moment the bet expires and not at any time leading up to the expiry of the bet.

Examples of upbets are:

1. Will the price of the CBOT US Sep 10 year Notes future be above $114 at 1600hrs on the last trading day of August?

2. Will the Dow Jones Index be above 12,000 at 1600hrs on the last trading day of the year?

3. Will the LIFFE Euribor Dec/Sep spread be above 10 ticks at settlement on the last day of November?

4. Will a non-farm payroll number be above +150,000?

Examples 1, 2 & 3 enable the bettor to make a minute by minute assessment of the probability of the bet winning. Example 4 is a number (supposedly) cloaked in secrecy until the number is announced at 13.30 hrs on a Friday.

In all the above examples the bet always has a chance of winning or losing right up to the expiry of the bet although the probability may be less than 1% or greater than 99%. The Notes could be trading two full points below the strike the day before expiry but it is possible, although highly improbable, for them to rise enough during the final day to settle above the strike. Conversely the Notes could be trading a full two points higher than the strike the day prior to expiry and still lose although the probability of losing may be considered negligible.

Ultimately the upbet is not concluded until the bet has officially expired and until then no winners or losers can be determined.

Downbets too can only win or lose at expiry. Although in many circumstances the downbet is simply the reverse of the upbet, the downbet has been treated with the same methodology as the upbet in order that other bets, e.g. the eachwaybet, can be analysed within a uniform structure. Also a separate treatment of downbets will provide a firmer base on which to analyse the sensitivity of downbets.