Figuring Wins and Losses in Binary BettingAdded - July 22, 2014 Financial
Binary betting is one of the easiest places to start if you're betting financial markets because they offer a very static level of wins and losses. What happens is that you're given a set stipulation that can either happen or not. For example, you could be betting that one particular market or stock will close higher than it opened for a day or for two days or whatever period of time. The price of the binary bet will be put in the form of two numbers with the format SELL-BUY. For example, it might be 37-42 where 37 is the sell price and 42 is the buy price. You can use these numbers to determine what your wins and losses will be with binary betting.
To begin with, you'll choose a price per point. Your wins and losses will be in terms of points, and you'll either win or lose your chosen price per point. So suppose you have a bet that says "market X will close higher for the day" with a price of 36-41. If you decide to bet that this is going to be true, then you are buying, and that means that your possible wins or losses are going to be based on the buy number which is 41. If you win, you'll win (100 - 41) = 59 points, and if you lose, then you'll lose (41 - 0) = 41 points.
Now suppose you wanted to sell on the same bet. Selling with binary betting means that you don't think that the statement for the bet will be true. The sell value on this bet is 36, so winning would give you (36 - 0) = 36 points while losing would have you lose (100 - 36) = 64 points.
If you're going to take binary bets, then you need to start off by making yourself a spreadsheet to do these calculations for you. You can also use these numbers to figure out how often you have to be right to break even on your bets based on how much you win and lose on each of the possible outcomes. Overall, binary bets are probably the easiest way to get into financial betting because you know exactly how much you stand to win or lose on every single wager that you take. This provides a level of control that you don't find with many other types of bets.