digital outcomes

L

lucysparabola

Figured I should go ahead and start a proper journal. I trade digital options solely through NADEX and may still open up with an overseas buddy through Binary.com for barriers. Still polishing up the model for the latter, so let's not mess around with that for the time being.

for those unfamiliar, digital (binary) options are an all or nothing payout when the underlying expires ITM or OTM. my holding periods for this journal will probably be no less than daily expirations; i often trade hourly and five minute bets if I see them but that isn't reasonable for a journal here.

I'll start with a daily ES bet - close will be less than the open at expiration today, so bet accordingly. the 2078 strike can be had right now for 57/100, so that's my call. hold through expiration.
 

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Currently trading 20x25.xx; still will hold through expiration.

FWIW and in the spirit of complete and utter transparency I will always, always, always hold through expiration unless posted here. I also will not have a stop on the bet as my debit is the max loss.

so in today's SP500, the max loss is $57 and the max gain is $43 gross of commissions.
 
Ha, I am glad for the loss actually - it revealed a huge mistake in my model. I use geometric points (gasp, technical analysis!) in my analysis and with this one all afternoon yesterday discovered I do have to use a higher period for reference. It will look like Latin to anyone but I'll post up images if there is interest.

Naturally, my post stating the "currently trading 20x25" was the low of RTH, lol. Up 58% on the trade, but it's cheaper than continuing to run an erroneous decision process.
 
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