Binary bets and odds pricing

[mantas]

i cant

I suppose, mulling this over, probably the best way to approach the volatility question is to turn it on it's head and work out the implied volatility and then you can make a judgement on it.

I keep looking at this and wondering why I didn't spot it before. I feel a bit daft looking at it now.

I've resolved the PUT option as =K*EXP(-Rf*T)*NORMSDIST(-D2)-S*NORMSDIST(-D1)

And therefore this is obvious how to calculate the down Binary.

I CANT STILL understand these ? 🙄

 

[Scripophilist]

Then I suggest you don't try and use them. Could end up getting very messy.

 

[apples10]

I've been trading binaries for over a year and a half.
Initially I had a binary model to check the prices quoted and thus used to back out the implied vols and then compare it to the 30 minute realised vol of both the cash and futures market.
Now I just trade when I want (usually about 10/15 trades a day) and just deal at the price quoted, decided it was easier to just not worry about the implied vols. I hav'nt opened my pricing sheet for over a month.
If you watch the prices closely, you get used to them and can 'see' what rough vols they are using, thus this am, it was obvious that prices were wrong after the jumps, but it did'nt make it any easier!

 

[mantas]

help help help

hello sir,
i am trading in binarybet. i have made some loss. could you help me how to make good trades?

I've been trading binaries for over a year and a half.
Initially I had a binary model to check the prices quoted and thus used to back out the implied vols and then compare it to the 30 minute realised vol of both the cash and futures market.
Now I just trade when I want (usually about 10/15 trades a day) and just deal at the price quoted, decided it was easier to just not worry about the implied vols. I hav'nt opened my pricing sheet for over a month.
If you watch the prices closely, you get used to them and can 'see' what rough vols they are using, thus this am, it was obvious that prices were wrong after the jumps, but it did'nt make it any easier!

 

[mantas]

Hello could you tell me how to use it? Everything how to use it?
i am trading in binarybet (decimal mode) could you have any formula for this? 🙄

The above computes the BS call price, which does not give you a binary price!!!!!!
If you want the binary derivation give me a shout. Here is the equation for a simple binary up bet:


Bin Up = Normsdist( (LN(S/K) - (0.5*(vol^2)*tau)) / (vol*sqrt(tau)) )

where S is the stock price,
where K is ur strike price (or pivot point),
where vol is your volatility,
where tau = (T - t) / 365, i.e T-t is the number of days until expiry

I've assumed zero risk free rate

Bin Down = 1- Bin Up

Is this any good????

 

[apples10]

Hi Mantas, there is a binary formula somewhere in this thread. But as I said, I've got my own model (mine is just a normal distribution model, you don't actually need to value a call or a put) - but I rarely use it, as the only info available from it is the implied vols that the betting company are using - you still need to read the market right to be successful.