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.TWhat You Will Learn:"""""using binary options.41Binary Options: Strategies for Directional and Volatility Trading.Alex Nekritin.© 2013 Alex Nekritin.Published 2013 by John Wiley & Sons, Inc.CHAPTER 4Binary OptionsContractCollateralMARGIN AND DEBIT RISK OF VANILLAOPTIONS AND FUTUREScan be scary, especially if you are holding positions overnight.ing will stay within a certain range or trade outside of a certain range byexpiration.put into the trade.One great factor of trading binary options is that your trades are fully4344 BINARY OPTIONSdebit balance risk.COLLATERAL EXPLAINEDdate.Highest PriceLowest Price0 25 50 75 100EXHIBIT 4.1 The Lowest Possible Price and the Highest Possible Price for aBinary OptionBINARY OPTIONS EXPIRATION VALUESneed to be clear on what happens to binary options at expiration:"contract.Binary Options Contract Collateral 45"Exhibit 4.2 depicts the value of binary option contracts at expiraEXHIBIT 4.2 Possible Expiration Values for Binary Options ContractsUnderlying Asset Value at ExpirationAbove option strike price $100Below option strike price $0loss ona binary option trade, this section will clearly show you what will happenif you lose binary option trades also!Once you are clear on how binary options are priced at expiration, youon binary option trades.basic principle, you should be able to grasp the concept fairly easily.COLLATERALIZING A LONG TRADE46 BINARY OPTIONSContract Bid OfferDaily US 500 (Mar) > 1268 2.1 5Daily US 500 (Mar) > 1265 4.9 7.8Daily US 500 (Mar) > 1262 9.7 12.7Daily US 500 (Mar) > 1259 17 20Daily US 500 (Mar) > 1256 26 29Daily US 500 (Mar) > 1253 36.1 40.1Daily US 500 (Mar) > 1250 48.1 51.6Daily US 500 (Mar) > 1247 60.1 63.1Daily US 500 (Mar) > 1244 71.2 73.9Daily US 500 (Mar) > 1241 79.9 83.4Daily US 500 (Mar) > 1238 87.4 90.4Daily US 500 (Mar) > 1235 92.3 95.3Daily US 500 (Mar) > 1232 95.4 98.412 hours to expiration, futures trading at 1250EXHIBIT 4.3 A Binary Option Chaingreater detail in the subsequent sections of this text.In the Money Long Collateral ExampleRationaleEntry Breakdownloss for this trade [ Pobierz caÅ‚ość w formacie PDF ]