I was just wondering if anyone here trades the binary options on the S&P or VIX. They ticker for the S&P is the BSZ and the VIX is BVZ. They dont seem to trade very much or are very liquid, just not very popular right now with everyone because they are so new. I was just wondering if anyone has tried them out or not.
You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
Binary Options
- Thread starter mike007
- Start date
I have looked at them but they require a total reprogramming of your thinking. Because they either are worth 100$ per contract or nothing at all, the price relationship is all screwed up.
Lets say S&P is 1000 and you have a call with a strike of 990 then the intrinsic value is 100$ (not 10$) and how the hell do you price time decay in a case like this?
Lets say S&P is 1000 and you have a call with a strike of 990 then the intrinsic value is 100$ (not 10$) and how the hell do you price time decay in a case like this?
Quote from heiasafari:
I have looked at them but they require a total reprogramming of your thinking. Because they either are worth 100$ per contract or nothing at all, the price relationship is all screwed up.
Lets say S&P is 1000 and you have a call with a strike of 990 then the intrinsic value is 100$ (not 10$) and how the hell do you price time decay in a case like this?
I'd say the binaries are a lot more straightforward than regular options, when it comes to pricing. The price is just a simple probability.
This month's TASC has an article on Binary Options thats pretty interesting. I haven't read through it all, but check it out at your local bookstore...
Basically it sounds like a good tool for those who need risk management .... and traders with small accounts (so you don't blow out your FX account)
They use an FX account example throughout that was well written. Worth looking into.
Basically it sounds like a good tool for those who need risk management .... and traders with small accounts (so you don't blow out your FX account)
They use an FX account example throughout that was well written. Worth looking into.
Quote from heiasafari:
I have looked at them but they require a total reprogramming of your thinking. Because they either are worth 100$ per contract or nothing at all, the price relationship is all screwed up.
Lets say S&P is 1000 and you have a call with a strike of 990 then the intrinsic value is 100$ (not 10$) and how the hell do you price time decay in a case like this?
There are various discussions in quant books.