Читать книгу Binary Trading - John Piper - Страница 27

The price of a binary bet may be said to reflect the odds that the event will occur. For example, if we see that FTSE is up and the bet that it will close up is priced at 80/85 we might decide that the odds that it will close up are between 80% and 85%. We might take the midpoint and say the odds are 82.5%.

If this statement is correct then we do not obtain any value by trading this bet. I will show one of the reasons why it is so important.

If the binary is priced around 80 the actual spread may be 78/82.

If we assume that the odds of the event occurring are 80% that means that the event will occur on 4 out of 5 occurrences. So, if you buy the bet you will win 4 times out of 5.

Is this good?

Unfortunately it is not good enough. Here is how it works out.

Every time you buy the bet it costs you 82. You must not forget that spread! You bet at £10 per point so your stake is £820.

You win four times (meaning the bet goes to 100), and each time you win 18 points (100 – 82) at £10.

Your winnings total 4 x £180 = £720

But you lose once and you lose your entire stake of £820.

Overall Loss: £100 (£820 – £720 = £100)