What is Financial Binary Betting?

Financial binary betting is a brand new betting product from MDS Spreads. Binary betting offers you a simple but dynamic betting experience, as it works on a ‘yes’ or ‘no’ principle.

Financial binary betting with your MDS Spreads account offers a great betting challenge and increased volatility on those days when the market is hardly moving.

What are the benefits of Financial Binary Betting?

• All trades are 100% limited risk. When you place a bet, you will always know in advance what you can win, and what you can lose. So whether you bet big or small, you are always in complete control.
• Increased volatility, exciting and dynamic trading opportunities even on days when the markets hardly move.
• Trade in and out at any time – this means you can take profit or limit losses by closing your position ahead of market settlement.
• A wide variety of new markets to choose from.

How does Binary Betting Work?

Placing a bet is easy:

1. Dealingdesk.co.uk will offer daily and weekly binary markets (e.g. Will the FTSE close the day up?)

2. You then decide whether you think that the market will close up or down, and place your bet accordingly.

3. If you think that the market will close higher and you “buy” then you will profit if the market moves “up” and either you close your position at a higher level or your open position settles “up” at expiry. (If the answer to the question is “Yes” then the bet always settles at 100 and if the answer is “No” then the bet settles at 0)

Example

1. Will the Daily FTSE Close Up? (Dealingdesk.co.uk price is 47-52)

2. You place a £1 ‘buy’ bet at 52. This means that you will gain £1 per point if the market begins to go up, and you will lose £1 a point should it go down.

Then either:

a. The market closes up and the bet settles at 100, so you win £48 (100 – 52 x £1)

b. The market closes down and the bet settles at 0, so you lose £52 (52 x £1)

What Can I Do If The Market Moves The Wrong Way?

If you place a bet and the market goes against you, don’t panic! You can trade ‘in and out’ throughout the day. This means that you can at any time close all or part of any bet that you have (subject to a minimum of £1) and therefore limit your potential losses.

In the example above “Will the FTSE Close the Day Up?” where you agreed that it would “Close Up” and therefore you bought £1 at 52 you risk losing £52. If the market drops 5 points then our new binary price might be 40-45.  If you now change your mind and think that the FTSE might close down then you could “close” your positions by selling £1 per point at 40, thereby limiting your loss to £12 (52 less 40) rather than waiting for expiry where your loss could be £52 if the binary settles at 0.

Equally the FTSE may have moved up and you may wish to take a profit ahead of expiry rather than taking the risk that the market might move back down. If the FTSE is up 5 points since you bought at 52 then our price might be 70-75 which means that you could sell out £1 at 70 for a 18 point profit of £18.

If you were confident that the market would close up then you might not want to take a reduced profit but rather wait until expiry when the bet settles at 100 and you would therefore make £48.

Binary bets therefore constantly present you with opportunities to trade market positions to expiry or to trade in or out for limited losses or guaranteed profits

What binary markets do Corner house Spread Trade offer?

We will offer both “Up/Down Bets” and “Range Bets”.

An “Up/Down” bet is, as the name suggests, posing the question “Will the market finish up?” or “will the market finish down?” where if the answer is “yes” then the market always settles at 100.

A range bet might ask “Will the FTSE close between 30 and 40 points up?” If the answer is “yes” and the FTSE closes within this range then the binary settles at 100 and the binary settles at 0 if the answer is No and the FTSE does no close between 30-40 points up

e.g. Will the FTSE Close between 30 and 40 points up?”

Our price is 30-35

You do not think that it will close up within this range so you think that the answer will be “No” and the make-up will be 0

You therefore sell £2 per point at 30 hoping to make a £60 profit (30 less 0 X £2). You will make this profit if the market closes anything other than up between 30 and 40 points.

If the market does indeed close in the 30-40 range then you might lose £140 (100 less 30 x £2) unless you have traded out before settlement.

Please note:

If UP and DOWN bets expire with the market unchanged, LCG rules that the market has expired UP

Furthermore, please note that binaries are only available between 8am and 5.00pm online and Customer Support is by email only.

Please be aware that Binary Bets are not FSA regulated and you will need to read and agree to a new set of Terms and Conditions before you begin using our binary betting service.

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