Wednesday, August 8, 2012

Best Binary Options Broker review - Daily Report &th Aug 2012 S&P 500 Em...



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Best Binary Options Broker review - Daily Report &th Aug 2012 S&P 500 Emini Futures.There are literally hundreds of Binary options brokers eztrader, anyoption, option bit, banc de binary,24 hour option, nadex etc there literally are hundreds if not thousands of binary options brokers. Whos the best binary options broker ? You know what first things first you need to get the best trading system or trading software out there before you risk your hard earned cash trading any sort of contract for difference , binary option or spreadbet .
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Text courtesy Of Wikepedia
Examples of a binary option tradesA trader believes that McDonald’s stock (NYSE:MCD) will close above the current (spot) price of $74.93 by the end of the hour. The trader can invest $100 in McDonald’s binary call option on that outcome. If his prediction is correct his payout is $170 (70% profit). If he is incorrect and the stock closes below the strike price he loses 85% of his investment (gets a rebate of $15).
Another common form of binary option that is traded is a touch/no-touch, also called one-touch binary option. In one-touch binary option, if the price of Google's stock (NASDAQ:GOOG) is at $495 and a trader predicts that the stock will "touch" the $500 mark during the trading period he can buy a one-touch option. Once the stock's value "touches" the $500 mark, the trader would immediately earn a 60%-70% gain. If the stock doesn't touch the predicted range by the end of the trading period, the trader looses 85% to 100% of the investment.
Business modelThe platforms do not charge fees from their investors. Their profit comes from the difference between the options that expire in the money to options that expire out of the money. This difference can be found by the formula below. In this (for each base asset with same expiry caristeristics), (W) is the in the money option payout in percentage terms (e.g. 1.7), (L) is the out of the money option payout in percentage terms (e.g. 0.15),  are the turnovers of transactions made for each outcome (e.g $1,000), (S) is the platform's gain.

In this example the platform's turnover is $2,000 and its profit is $150 or 7.5% on turnover. As the platform’s gain comes from the above formula, most platforms will be indifferent as to the outcome of a single trade. Note that if  is not equal to  then the platform will have to act as a market maker. This can cause the platform gain (S) to be more volatile then in the above formula. In a fair platform in order for the investor to make a long term profit he has to predict correctly 54.5% of the time.[2]