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Binary betting is a form of fixed odds betting that allows you
to take a view on whether an event is going to happen or not. If
the event is deemed to have happened your bet expires at 100, and
if not your bet expires at 0. You know the two possible outcomes –
i.e. how much you could win or lose – at the outset of the
trade.
In this example we use the UK 100 UP on the day. You
should read this example in conjunction with our Binary Betting information page.
If the UK 100 closes UP on the day, the event is deemed to have
happened and so the bet expires at 100.
If the UK 100 does not close UP on the day, the event is deemed not
to have happened and so the bet expires at 0.
It's 16h00 and the UK 100 Cash is trading down 2 points from its
opening level.
Finspreads quote for the UK 100 Cash Binary Up is 30 – 34.
If you think that the UK 100 Cash will close up on the day, you
buy at 34 (the offer price).
If you trade £1 per point, you immediately know that you stand to
win £66 or lose £34.
Your profit or loss is calculated as follows:
Profit – if the UK 100 Cash does indeed close up on the day:
100
(expiry price) – 34 (opening price of your trade) x £1 (stake) =
£66 profit.
Loss – if the UK 100 Cash does not close up on the day:
34 (opening
price of your trade) x £1 (stake) = £34.
Please note that Binary Betting activity is not regulated by the
Financial Services Authority. The normal protections afforded by
the regulatory framework do not therefore apply.
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