Binary Option Betting

With the introduction of binary bets by IG Index in 2003, the world of financial betting has become richer by another new concept. Afterwards, IG Index also launched its sister company with the name of Binary bet.com. This company was solely dedicated to binary betting which is also popular as ‘ExtraBet’. CityIndex entered the line in April 2004 and gave the world a new betting platform known as Binexx, this too for binary betting only, which was directly integrated in the CityIndex platform at that point itself.

As it is in the traditional financial spread betting, binary bets also have two-way price quotes that are Bid and Offer. Here you place a bet in $’s per point. However, the price of the bet is not based on the price of the asset, but on the estimation on the direction in which the market will head and due to this very reason, it is quoted only between 0-100. The greater the estimation of the asset in a fixed time, the higher is the profit earned. For instance, suppose that you notice that an Offer/Bid price for FTSE100 Index to close at a higher price, say, 86-90 that day (thus, odds in this case are high). Obviously, you will need to consider the time factor, since the longer that market behaves according to that estimation and the nearer it is to closing time, the higher will be the quote until finally it is quoted at 96-100. The point here is that strongly quoted odds at such time signify a virtual accomplishment of that event.

It is called a binary bet because till the expiry period, one can get only two possible results – it goes higher or it does not. If the event finishes at a higher note, the bet is likely to settle at 100 and in case it falls down, then there will be no profit at all and the event will settle at 0.

In binary betting, you are aware of the maximum profit or loss beforehand and so you can lock your profit before the event expires or limit your loss. This means that if you have placed a bet, then before it expires, you can sell your bet at the current price and vice-versa. There is no place in binary betting for other types of betting such as Limit, Stop, and others.

Often, people describe binary betting as ‘fixed odds’ also or express it as a financial spread bet and it is true up to some extent. The reason is that in both types of betting forms, the maximum gain or loss is known in advance. However, one should not forget that binary betting allows you to control your loss by offering an early closure to maximize your profits and minimize your loss. In other traditional betting forms, once the bet has been placed, you cannot change it in between the event. However, in binary betting you always stand a chance to decide whether or not you want to continue.