Option brokers

[Sig]

Binaries on the VIX are traded on the CBOE. They used to offer binaries on the SPX, but that product was delisted several months ago. Unfortunately there are a limited number of brokers that offer trading on this product at the CBOE. Not sure who currently offers them, although most front end products such as Redi do show them.

You are really better off replicating a binary option through a vertical. This will give you a similar product and you will give up less edge.

The answer is no retail brokers offer them, at least CBOE couldn't tell me any that did and volume reflects that. Nadex and Cantor Exchange are the only CFTC regulated binary exchanges that a retail investor can realistically access, and Cantor only offer forex while Nadex does offer S&P500 but not VIX.
One other note, the CBOE binary options use the "Special Opening Quotation (SOQ) of VIX calculated from the sequence of opening prices of the options used to calculate the index on the settlement date." which is a funky way of calculating the VIX level that can result in a VIX settlement that is quite different from the opening VIX price and can even be higher or lower than any VIX quote all day. This may make sense in some situations when they do it for the S&P 500 regular index options, but for binary options it's pretty senseless and combined with the lack of retail brokers it ensures these products will never catch on.

 

[FSU]

The answer is no retail brokers offer them, at least CBOE couldn't tell me any that did and volume reflects that. Nadex and Cantor Exchange are the only CFTC regulated binary exchanges that a retail investor can realistically access, and Cantor only offer forex while Nadex does offer S&P500 but not VIX.
One other note, the CBOE binary options use the "Special Opening Quotation (SOQ) of VIX calculated from the sequence of opening prices of the options used to calculate the index on the settlement date." which is a funky way of calculating the VIX level that can result in a VIX settlement that is quite different from the opening VIX price and can even be higher or lower than any VIX quote all day. This may make sense in some situations when they do it for the S&P 500 regular index options, but for binary options it's pretty senseless and combined with the lack of retail brokers it ensures these products will never catch on.

Just to note, this is the same way the "regular" Vix determines opening price on settlement. So if you have a Binary Vix option hedged with a regular vix spread there is no settlement risk. In fact when they traded more, I would often have these spreads on. It was a great play for instance being short say the 15 Vix binary put and long the 16/15 put spread. If you could put this on for zero, you would have a free shot if the Vix fell between 15 and 16.

Both platforms that I use, WEX and REDI support the Vix binaries at the CBOE. Clearing through APEX and Goldman. The problem as you mention, I don't know of a retail broker that handles them. Think or Swim used to, but it threw off their risk models, so they stopped allowing them. As access shrinked, so did the volume.

Also as mentioned, simply doing the vertical is a great synthetic for the binary. Suppose you want to short the 15 vix binary put. If you sell the 15/14 put spread, you would have a similar profit loss, except your maximum loss would be at 14.

 

[doggyfx]

Optiontrade is a gambling site. You can't make money at optiontrade.

Well I think Optiontrade and Binary options in general won't fit professional trading needs, as you have limited option on risk management, charting tools, market analysis. Probably it will be a good choice for newbies who want to test their "financial prediction skill" without losing too much.
I doubt if he signs up with a top-grade broker, put there some K of his savings wagering with decent leverage on pound growth ahead of Brexit there won't be any merit for the broker which ensured best execution and spreads for him..
So I think its a double edge sword when we see trading in the prism of newbie skills and desires for quick gains.