Binary Betting: Tunnels and How to take Advantage of Them

I've gone through the IG Index dealers handbook and it doesn't mention binary betting tunnels. So today I'll go on to explain some binary betting tunnel strategies and how you can take advantage of them.

When I place a binary trade I assume that the market will stay within -110 to +110

So what made you think it would stay within -110 to +110 as opposed to -100 to +100?

Well I use a very simple formula. If the odds look good I take a punt.

When they open the price on the higher ranges is high and the price on the lower ranges is low. As time goes by and the price of the underlying shifts then it effectively 'knocks' out some of the lower ranges.

So let's look at the FTSE which is running now. You can see that it has tunnel ranges with 5 point increments. Now as I look there has already been a shift in the price of more than 20 points at some point today as the first few tunnels with ranges of less than -20 to +20 have already closed out.

The price right now to buy -25 to +25 is 9 to buy and 0 to sell. With the change today showing -22 and whilst writing this it has dropped to -25.7 and therefore the -25 to +25 tunnel has closed out also. Anyone money on that binary will now belong to IG Index. It will be removed from your open positions and you balance updated.

Now as the FTSE keeps dropping so does the price to buy the larger and larger tunnel ranges. So if you watch the FTSE moving and as it falls you decide at some point it will start to recover then you can buy in at that point and hope it does recover or at least go back up and stay within the range you have bought. As it goes back to 0 change over the day your Binary will go back up in price and you can take your money then. Or you can ride it out in the hope it will end the day within the range you've set out.

Another option is just taking a punt on one of the higher ranges in the hope it won't move much. But you pay more for the higher ranges if the underlying is near no change.

Yesterday I saw the Wall St fall a lot and then start to rise a little. I took a gamble on it rising more and then staying within the range. I took a position on the smallest range available at that time. It was a total punt and it paid off.