Binary

So far we have discussed financial spread betting. The new kid on the block is a digital option or fixed odds bet (stock market betting), which is yet another tool for us active traders. Unlike a spread bet a digital option does not require margin, no stops and you know the exact maximum risk and maximum profit. Unlike CFD's these products are still tax-free and will likely to remain tax-free for years to come. No UK spread betting company offers this facility; however an excellent service is provided on the internet by Binary.com

More About Binary Stock Market Betting - (What They Say..)

"Binary.com (previously named Betonmarkets) eliminates the middleman and allows you to capitalize on your opinion of a future market level in a very similar way in which you would buy a fixed-odds bet on a sporting event. Since you don't directly own the stock, deals are made instantaneously and you don't have to wait minutes or even hours for bets to be executed due to heavy trading periods.

Binary.com features fixed odds financial bets that pay a fixed amount (or nothing) on expiry. In other words, when you buy a fixed-odds bet from Binary.com, you are entitled to receive a payout, which is a fixed multiple of the amount you have staked. With fixed odds financial betting you always know how much you may win, and how much you stand to lose if the market moves against you. There are no hidden surprises. The product range is offered on a number of global index markets, currency pairs, UK and US stocks and Gold.

The betting system itself is fully automated and there is minimal human intervention in the bet dealing process. This has allowed the provider to keep commission levels to a minimum and made it possible for us to offer smaller bet sizes. You don't need 10 grand of capital to get started at Binary.com; you can even start with £100 or less should you wish to.

The provider's user-friendly interface makes it so simple that it's a great way to start if you have always considered the stock markets as a sealed book. You can register online, fund your account with a credit card or debit card and start betting in just a few minutes. We don't require you to fill in and send us any fax application forms to create your account. Binary.com also provides you with the opportunity to create a virtual money account (i.e. demo account) to test our dealing system risk-free before creating a real money account and committing yourself to betting with real money.

Once a bet has been executed this will be displayed in your portfolio and you have the possibility to close your bet out before the final settlement, to cut your losses or pick your profits out early. The advanced mode setup includes functions allowing you to place limit orders and triggers to buy bets at lower prices than those prevailing at the present time or to automatically sell contracts back to us once the market price hits a specified level."

This all sounds good; but where's the catch? - (What We Say..)

Simple, the complex and really tricky part of Binary.com is deciding the market direction. However, I'm convinced Binary.com offers an opportunity for a skilled financial bettor to produce steady monthly gains. Binary.com admit that they balance their book by making bets more expensive as they become more popular and vice-versa and charge a commission on each bet purchased which I have calculated can vary from just 2% to up to about 12% for the sucker bets. This means that Binary.com (previously called Betonmarkets) harness the power of supply and demand and effectively reduce sales of contracts that increase the exposure of their book whilst increasing demand on those that reduce it - news that should cheer any contrarians looking for a punt on the markets. Moreover they seem to hedge their net exposure by buying future contracts in the open markets whenever possible to eliminate the excess risk.

However, I really got excited about this whole concept when a friend of mine; Lynn Weston made over $20,000 trading with them last year. I know of several others who have made much more than this since but they've asked me not to name them in public so I'll respect their privacy.

I've been personally using Binary.com for more than a year now and apart from some very stupid mistakes where I lost a lot of my capital and had to replenish my account, I'm now enjoying finally enjoying a healthy profit. Their range of markets and shares is limited (but this is getting better all the time) and on some occasions their servers experience problems - the classical "Server Load too High".. and of course I hate the inability to price bets when the market is at an intraday high or low!!

A great thing about this provider is you can start making money with $50! What kind of money could you possibly make with $50 in the stock market through most online or full service brokers? $50 wouldn't even cover the commission of a full service broker. With Binary.com, you customize your own contract. The contracts are mini-derivatives, and allow the little guy to play the markets and make money just like the big guys, except on a smaller scale.

For a beginner Binary.com gives you a great way to obtain stock market exposure with limited risk; as opposed to financial spread betting where you can lose your money, job, shirt and more - you can only lose what you bet when the odds are fixed. It is much simpler than trading options but gives you many of their benefits. Combining Binary.com to minimize risks and financial spread betting may probably be the key to ultimate success.

Binary.com is in fact no different in "odds" to any other form i.e spreadbetting. Take for example doing a spreadbet on the daily Dow @ £10 p.point. Well the spread is 16 (with IG Index), making an instant £160 loss which you now have to make up before getting into credit.

Of course then trailing stops come in. But the problem faced with spreadbetting is that with sudden market bounces, stop losses can soon be hit and then as the market retraces you miss out. Here with Binary.com this is not so (unless you do a No TOUCH).

The reason why i advocate it at the moment is because the website is designed and orientated around beginners, and just coming to terms with market "jargon" is hard enough, never mind watching for hit stops and adjusting trailing stops.

Binary.com can provide a "safer" environment to trade, for very small amounts (a few pound at a time) whilst educating yourself about how things work.

Also, the different forms of bet ar worth while as well, no touch, one touch, barrier range, higher/lower than etc

Its maximised loss potential is what makes it good for beginners, but it comes at a premium; which is that the odds slightly favour the house..

# Always use a trailing stop to protect your profits.
# Always stick to the same plan.Go short 3 times or long 3 times. In other words if you went long on 1st trade and lost? Go long AGAIN on the 2nd! if wrong? You MUST go LONG again on the 3rd a attempt.

The probability of being correct are stack'd in your favour. Also most importantly if the market went down for two days [against you] its more likely the third day you will see a massive rally [in your favour] You MUST milk it all the way with the trailing stop and show no MERCY. I hope you get the picture????.

The reason why i advocate Binary.com at the moment is becuase the website is designed and orientated around beginners, and just coming to terms with market "jargon" is hard enough, never mind watching for hit stops and adjusting trailing stops.

You do pay a premium for the simplicity i feel, as the rates are not as good as the more traditional methods of trading, but it is a great, simple way to begin..

Advantages of Fixed Odds Stock Market Betting?

Profits FREE from Capital Gains Tax

Your risk is limited to your stake at all times yet high leverage is still possible; you risk a fixed amount of money (purchase price of the bet), which constitutes your maximum liability.

Fixed odds betting contracts constitute a limited risk facility for gaining upside, sideways or downside exposure on a number of global traded markets.

Instant, easy, simple and flexible - near-instant executions. You choose the closing time and date for all contracts which can be as little as 10 minutes (as for the Intraday Doubles) from the current time and as long as 6 months. You choose your potential winnings per trade and you never have to risk more than you want to. You don't need to monitor the bets or regularly follow the markets; you can let contracts expire on the settlement date without having to determine when to cut a losing position or to pick profits.

Versatility - you can adapt or adjust your positions according to any situation that arises. This means you can do everything from protecting a position from a decline to outright betting on the movement of the stock markets. You can even buy bets that payout if the market moves downwards or even stays level.

You don't need to own assets in order to profit from them - you can fund your account with a credit card/debit card and bet on the Dow for as little as as £5 and as much as £50,000.

Disadvantages of Fixed-Odds Stock Market Betting?

When a digital option ends up in the money, it is worth $1 no matter how much in the money it is. Therein lies the root of our paradox, the fact that the value of a Digital option stays constant at $1 even as the option gets more into the money. In other words, the option holder's payoff stays flat even as the standard option's intrinsic value increases.

The maximum loss is always limited to the premium (i.e. stake) but losses are still possible. - Bet sensibly! - Start with small stakes and tight money management.