orcun (Street Articles Author)
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Binary Options - Probabilities, Odds, And Payoffs
Odds and payoffs are inextricably linked together. They are versions of the same concept seen from a different point of view and, along with probabilities, they are the mathematical backbone of games of chance and gambling. They are also a wonderfully simple lead-in to the much more complex world of…
By:  in  Investing  >  Day Trading   Nov 11, 2012  
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Binary Options - Creating First And Second Option
Let’s see how an option might be constructed and valued with the four coin toss model. Your friend says he’d like to bet so that he only wins! (Don’t we all?) He really hates paying when he loses, but he wouldn’t be against paying a little something up front before…
By:  in  Investing  >  Day Trading   Nov 11, 2012  
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Binary Options - Returns
Return is the preferred term for an investment’s payoff. If you watch CNBC television enough or speak to a few investment banker types, you will come to believe that returns are the only things that matter in the universe. ‘‘Return on this’’ and ‘‘return on that’’ and ‘‘year-to-date returns’’ are…
By:  in  Investing  >  Day Trading   Nov 11, 2012  
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Binary Option - The Beginning
In the past 5 years the price movements in the markets have been positively spectacular. In fact, it might be more true to say that the markets seem to have gone volcanic, erupting and spewing fire in all directions before lapsing back into a period of relative quiescence. For a…
By:  in  Investing  >  Day Trading   Nov 09, 2012  
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Binary Options - Derivatives Today
There are about two dozen world commodities. These days almost every actively traded commodity has a futures market, a market, and a binary options market associated with it. This is true of currencies and government bonds, too. Stocks, however, have more controls placed on them by the U.S. Securities and…
By:  in  Investing  >  Day Trading   Nov 09, 2012  
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Binary Options - Single Stock Futures
In December 2000, after 20 years or more of internecine warfare, the federal government finally passed legislation to allow for the trading of futures. It took another 2 years of red tape and regulatory posturing until the exchanges began trading in November 2002. What could have been a slam-bang start…
By:  in  Investing  >  Day Trading   Nov 09, 2012  
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Binary Options - Probabilities And Gamblers
If you were a gambler shooting dice just a few hundred years ago, you were treading in unknown territory. And it was hard to find a game; there were no Vegas or Atlantic City casinos for action. Maybe that was because probability theory hadn’t yet been invented and games of…
By:  in  Investing  >  Day Trading   Nov 09, 2012  
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Binary Options - Getting Comfortable With Derivatives
Every day we see and easily understand real-life derivative relationships all around us. Once you get the hang of it you will see that most financial derivatives are not so difficult to grasp. While the mathematics might be daunting at first, merely getting an intuitive feel for the purpose and…
By:  in  Investing  >  Day Trading   Nov 09, 2012  
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Binary Options - Comparing Futures And Forwards
The futures market is the average person’s marketplace for deferred delivery. These markets trade standardized contracts (e.g., every gold contract traded on the New York Commodity Exchange is identically the same), and they transact ‘‘downstairs’’ in a ‘‘pit’’ on Commodity Futures Trading Commission regulated exchanges. They typically call themselves futures…
By:  in  Investing  >  Day Trading   Nov 09, 2012  
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Binary Options - Where We Are Headed
So, let’s spend a moment talking about the path we will follow. Using very simple analyses we will investigate and discuss options in ways similar to those uncovered by the economists who pioneered the earliest option theories. For them, at that time, many of the answers were not as clear-cut…
By:  in  Investing  >  Day Trading   Nov 09, 2012  
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