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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. There are only two outcomes with a
binary bet as an event either occurs or it does not.
For example you could bet on whether
the UK 100 will close up on the day or not. In this
case you would be taking a view on whether the UK 100 would close
higher, or lower, than its current price.
Just like a spread bet, you buy or sell for a
certain amount per point depending on your view. You can also close
a position before it expires to cut your losses or realise your
profit.
The key difference to spread betting is that
you know your maximum upside and downside at the outset.
For example:
If you were to bet on the Midday UK 100 Up
market (i.e. you bet that the UK 100 will be up at
Midday) and the price quoted was 35-39, if you bought £1 you would
know that:
Your maximum profit would be (100-39) x £1 =
£61
Your maximum loss would be 39 x £1 = £39 (your
initial stake)
Binary betting offers high volatility with
controlled risk. It is popular with traders who like to take
short term positions by betting on hourly, intraday or weekly
markets with a strictly limited risk known at the outset of each
trade. With Finspreads, you can trade a number of different
binary markets, on live streaming prices, from 50p per point.
See our worked example on how to place a binary bet
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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