Talk:Binary option/Archive 1

Archive 1

Digital options

In the interest rate market, they are more commonly called digitals. Is that true for other markets too? If so, we should move this article. Pete/Pcb21 (talk) 17:12, 3 Mar 2004 (UTC)

It's fine at Binary option. I think "binary" is more common in most markets. —Quarl ^(talk) 2008-07-27 19:57Z

Merge from Fixed return options

I'm merging the article Fixed return options to Binary option. —Quarl ^(talk) 2008-07-27 19:58Z

expansion

I expanded the article to talk about CBOE and Amex binary options, and valuation that takes volskew into account. —Quarl ^(talk) 2008-07-27 22:17Z

The partial derivative with respect to K of the vanilla option price is wrong because d1 is also a function of K, so the chain rule must be used to calculate the true partial derivative. —Preceding unsigned comment added by 68.161.127.82 (talk) 04:51, 18 February 2009 (UTC)

error in pricing formulas for Cash-or-nothing call and call

I fixed it, it should be d1, not d2 in both cases. Source: http://www.global-derivatives.com/index.php?id=27&option=com_content&task=view My guess is that the original source was miss quoted. I don't have that book here to check. Also, I did some computations to verify. Furthermore, this link: http://www.sitmo.com/live/OptionBinaryCash.html appear to use this correct formula. —Preceding unsigned comment added by 84.55.122.31 (talk) 03:42, 5 March 2009 (UTC)

Message to Ulner: Binary option

Hello, why did you remove all the external links from the article? I'm sorry, but I fail to see how is Binary Option different from video sharing or file sharing services, that do include external links to the various companies? Cheers. --NetHunter (talk) 11:54, 31 May 2009 (UTC) —Preceding unsigned comment added by Ulner (talk • contribs)

See WP:EL - Links normally to be avoided: "5. Links to web pages that primarily exist to sell products or services, or to web pages with objectionable amounts of advertising. For example, in the mobile phone article, don't link to web pages that mostly promote or advertise cell-phone products or services. " This means that we should not include a list to all companies where you can buy/sell options. A big number of external links which do not add unique content are confusing for the reader - and the relevant links are lost in a big number of less relevant links. But I understand your comparison to file sharing sites - perhaps some external links should be deleted there as well? Ulner (talk) 17:36, 31 May 2009 (UTC)

Perhaps some of these companies which sell options have a Wikipedia article of their own (E-Trade?), and can be linked internally if appropriate. Ulner (talk) 22:06, 31 May 2009 (UTC)

Re Rev. change from 16:39, 21 July 2009

Ulner - You seem to have waged a crusade against all spammers in Wikipedia, and that's fine. However, in the case of Binary Options you seem to insist on removing reference to some of the binary option platforms, whereas you keep links to AMEX and CBOE in place. Why is that? AMEX and CBOE are commercial organizations just like NADEX (formerly HedgeStreet). Why would you remove NADEX and keep CBOE? And on the same token - EZTrader, which I work for, really did revolutionize the field of Binary Options by releasing the first Internet platform for trading them. I assure you that a large percentage of people who search for Binary Options in Wikipedia are interested in references to companies, exchanges and platforms that allow you to trade them. We're not talking about an area where Hundreds of companies are competing to get their name into Wikipedia - this is a very narrow field with less than a handful of organizations involved. If you do decide to maintain the rigidity of how you sweep out any external link from Wikipedia, you probably want to remove any reference to CBOE and AMEX, which are commercial companies with one purpose in mind - making money. —Preceding unsigned comment added by Itairaz (talk • contribs) July 22,2009

I have put the link back, so the issue can be discussed futher here at the talk page. Ulner (talk) 23:48, 21 July 2009 (UTC)

What about my argument above (Links normally to be avoided: "5. Links to web pages that primarily exist...")? You mean that many people reading this page are interested in finding info about EZ Trader as well? Ulner (talk) 23:50, 21 July 2009 (UTC)

External links to Online trading platforms

Any comments: Should we link to external online trading sites? Should we link to all external online trading sites? This is of course of interest for the reader of the article, but is this possibly in violation of WP:EL? Ulner (talk) 16:55, 1 August 2009 (UTC)

BinaryOptionsExplained.com

I truly do not understand why the links to [http ://www.BinaryOptionsExplained.com BinaryOptionsExplained.com] are being denied every time, I see the financial-Edu link there constantly and yet that is pure advertisement for a corporate that is providing information about trading, and is a sales website! it has items for sales, plus it is not targeted information as it is providing the information about real estate, stocks and much more, my link to [http ://www.BinaryOptionsExplained.com BinaryOptionsExplained.com] is to a website that is pure information that is either on binary options, or relative information. so my question is, links to an outside source of not targeted information and is a sales website is ok, and to a targeted website that does NOT promote any trading platforms, isn't asking for any payment and is completely free information isn't? why is that? what did i ask for, a simple link to help grow the website to a point that i will be able to provide assistance to every trader? all i'm trying to is to provide information to improve their trading because the trading platforms they use provide only bits and pieces to make sure they gain a bit but loose a lot, i'm trying to reverse that.. so please assist!

www.binaryoptions.com

I put a link up for [www.binaryoptions.com] which has been removed. Why? It is well written and highly informative. Topdogtrader (talk) 21:37, 17 February 2012 (UTC)

Citing reference number is wrong

Sorry, but I screwed up citing 15. The number 15 refers to Hamish Raw's book which is listed as reference number 14 in the list below. I can't figure out how to change things. Profuse apologies. — Preceding unsigned comment added by Topdogtrader (talk • contribs) 22:08, 17 February 2012 (UTC)

Fixed. (I named reference #14 and made #15 a call back to that name.) —C.Fred (talk) 22:11, 17 February 2012 (UTC)

Much appreciated C.Fred. Thanks. Topdogtrader (talk) 08:17, 18 February 2012 (UTC)

www.binaryoptions.com AGAIN

A week ago I asked why my site www.binaryoptions.com has been removed from the reference page. Now a link to the sites specialist pages on strategies has been removed. This site has more knowledgeable, technical content than any of the other sites pushing for links to sites that are solely conduits to the gambling industry. So yet again, I ask 'Why?' — Preceding unsigned comment added by Topdogtrader (talk • contribs) 11:05, 25 February 2012 (UTC)

First, the purpose of the site is to promote the book called Binary Options:Fixed Odds Financial Bets by Hamish Raw, who is also the registrant for the binaryoptions.com domain. External links policy on Advertising and conflicts of interest states You should avoid linking to a website that you own, maintain or represent, and in this case, you are the site owner as you've stated here;

" ...my site www.binaryoptions.com... "

Your conflict of interest contributions to wikipedia consist entirely of WP:CITESPAMING links to binaryoptions.com and is considered WP:Spam. Looking through your contributions as a whole, they all seem to be binaryoptions.com related. Please do not continue adding links to binaryoptions.com. It has become apparent that your account is only being used for spamming inappropriate links and for self-promotion. Wikipedia is NOT a "vehicle for advertising" and persistent spammers will have their websites blacklisted. Any further spamming may result in your account and/or your IP address being blocked from editing Wikipedia. --Hu12 (talk) 00:55, 18 June 2012 (UTC)

Binary option broker or platform

Hi, i've added on the 26th a new reference for binary option broker or platform, by my point of view its something that should be important for the binary option page. i will appreciate if you could have a look and approve it back, cause it has been removed. i didn't put any external link and i wrote it only to inform visitors about the binary options platforms.

Thanks, sydney — Preceding unsigned comment added by 46.120.152.162 (talk) 05:13, 28 February 2013 (UTC)

Merger proposal

I propose that Binary options trading platform be merged into Binary option. The content in the 'platform' article largely covers the same ground as this one, and the small amount of material specifically about the platforms can be incorporated as a new section with Binary option. --Hobbes Goodyear (talk) 16:34, 21 December 2012 (UTC)
 Done --Hobbes Goodyear (talk) 10:43, 5 January 2013 (UTC)

Cannot be sold?

This seems to be factually incorrect as some brokers offer an opportunity to sell a binary option contract before expiry:

Binary options once bought cannot be resold before the expiry time is reached.

Anyone care to find some good no-spammy source to fix this? Enivid (talk) 16:42, 11 October 2013 (UTC)

I didn't see support for the statement in the source that was provided, so I went ahead and deleted it, and marked "cannot be liquidated (buy or sell to close) before expiry" as disputed. —rybec 19:16, 11 October 2013 (UTC)

History

Someone can add some information about the history op the Binary Options? Like who is the creators, the first company that immplements this type of commerce, etc...

Thanks regards. This it will be very helpful information for many people, like me! — Preceding unsigned comment added by 212.179.246.19 (talk) 13:36, 16 February 2014 (UTC)

Jargon...

What does "in-the-money" mean? — Preceding unsigned comment added by 184.147.122.14 (talk) 16:26, 7 April 2014 (UTC)

Binary options trading platform

According to the old site "Binary options trading platform", in my opinion also a link to a listing of all binary option brokers should be set here: http://www.binary-brokers-check.com/full-binary-brokers-list-all-on-the-market/ (currently about 280 active brokers), thank you. — Preceding unsigned comment added by 89.248.147.248 (talk) 20:25, 1 May 2014 (UTC)

Sorry, but that's not an authoritative source. It is just another spam attempt. Enivid (talk) 17:43, 2 May 2014 (UTC)

Paragraph move request

I have a disclosed conflict of interest in this area. I believe certain paragraphs should be moved from the "non exchange-traded" section to the next as they actually refer to exchange-traded options.

1. The paragraphs beginning "Since mid-2008" and "The platforms offer" can be moved from "Non exchange-traded binary options" to "Exchange-traded binary options" after the paragraph beginning "In 2007".
2. The section "Business model" and its paragraphs can be moved as a whole to after the section "Exchange-traded binary options". My expectation that such text would not be in the "non" section led to my being confused about the content earlier. Alternatively, it can be moved as a whole to after the section "Example of a binary options trade", but I have no knowledge about whether this section is actually applicable to non-exchange trades such as those engaged in by the companies listed as not being licensed by CySEC.
3. The paragraph beginning "The U.S. Commodity Futures Trading Commission" can be moved from "Regulation and compliance" to the end of "Exchange-traded binary options" after the paragraph beginning "In 2009".

It is important that the distinction between non-exchange and exchange trades be preserved correctly. If it is held that moving the paragraphs down would be inappropriate because it might be regarded as downplaying negative information about my company, Banc De Binary, this might be remedied by swapping the order of the non-exchange and exchange sections. However, the current appearance of the information is misleading as it blends the two categories of trades. BDBIsrael (talk) 18:27, 16 June 2014 (UTC)

I am closing these two edit requests. There is not close to enough information to make the edits as requested. However, the original requester has been blocked, and no one else has stepped up with enough interest to review the proposals. As I noted months ago, references and other work is needed. If anyone wants to work on it they still can, but I'm removing this from the list of edit requests.--S Philbrick(Talk) 21:13, 18 October 2014 (UTC)

Re-insertion request

Based on input from BDBJack, who previously deleted these paragraphs as unsourced but who wanted them better sourced, rewritten, and re-inserted, I have rewritten the informative text so that it may be re-incorporated into this article. I would like to insert this section after "Interpretation of prices" and before "See also".

<begin insertion request>

Structured binary options strategies <use two hyphens before and two after>

Put options were not introduced on the CBOE until 1977, four years after call options were listed for trading. The binary options market since 2007 is in a similar no man's land. There is a vibrant regulated foreign exchange binary options market with sophisticated binary options strategies, while at the other extreme there are many online gambling platforms offering one-hour bets designed to resemble investments.

The binary options market has its range of straddles, strangles, call spreads, butterflies, condors, etc., which have not been significantly explored by exchanges. Tunnels, also called rangebets or corridors, are reasonably well-known and are priced in the manner of a conventional call spread, although the tunnel is primarily a volatility trade. Other strategies such as Duke of York, tug of war, and accumulators, provide distinct and unique profit and loss profiles.

Binary options are generally perceived as European-style options, which cannot be exercised before expiry. American-style binary options exist, but are usually referred to as one-touch options. A comprehensive list of binary options strategies would include European and American binary options, knock-in and knock-out binary options, and two-asset binary options.

<end insertion request>

References

BDBIsrael (talk) 01:22, 17 June 2014 (UTC)

I am hesitant to respond, because I am not sure I will be able to follow through (sounds too much like work). However, while 1997 date for the start of put options is sourced, nothing else is sourced.

The first sentence of the second paragraph starts by asserting that several strategies exist, but closing suggesting they do not. Which is it?

Tunnel is not explained well enough to be understood.

You cannot simply refer to strategies such as Duke of York and tug of war without explaining them. If they also exist for non-binary options, it would make sense to have a discussion as part of the option article, which could then be referenced, but to use jargon without explanation is not acceptable.

That applies, not just to this request, but the article as a whole. As a comment up thread mentioned, terms such as "in the money" are used without explanation.--S Philbrick(Talk) 19:57, 19 June 2014 (UTC)

"In the money" and "out of the money" are standard financial terms. See Moneyness. "Duke of York", though, appears to be a concept mentioned only on promotional sites for binary options.[2][3]. None of the articles about it indicate how to price it properly. John Nagle (talk) 07:06, 16 July 2014 (UTC)

I know what "in the money" means. However, we are aiming this encyclopedia at a readership that may not know. We owe them an explanation. The fact that we already have an explanation means it should be easy to link.--S Philbrick(Talk) 21:00, 18 October 2014 (UTC)

I am closing these two edit requests. There is not close to enough information to make the edits as requested. However, the original requester has been blocked, and no one else has stepped up with enough interest to review the proposals. As I noted months ago, references and other work is needed. If anyone wants to work on it they still can, but I'm removing this from the list of edit requests.--S Philbrick(Talk) 21:14, 18 October 2014 (UTC)

More clarity needed on options vs bets.

Under the heading of "binary options" fall several quite different things. There are real exchange-traded binary options, and the US NADEX exchange supports trading them. For each buyer, there is a matching seller, and prices are determined by the market. Then there are schemes where "binary options" are just bets against the house, such as with Banc de Binary and Softoption. Those are bucket shops; there is no exchange, and the "house" is the counterparty and sets the prices.[4]. In its most extreme form, this is reduced to a slot machine, where suckers can bet on whether gold will go up or down in the next 15 seconds.[5]

Whether a binary option is a trade or a bet is an interesting question. Different countries take different regulatory approaches. The US won't allow "betting against the house" at all. The Isle of Man regulates it as gambling. Cyprus regulates it as a financial service.[6] The European Union is working on EU-wide standardization as part of MiFID 2. John Nagle (talk) 22:00, 3 July 2014 (UTC)

Black-Scholes model math may be OR

The math section needs work. It doesn't appear to be wrong, but it's badly cited and lacks adequate explanation. Here's a half-finished unpublished paper with relatively simple derivations of the pricing model.[7] Those results match the article, although the symbols are different. Then there's this badly translated paper out of China via Canada.[8]. This is a more reliable source, but the results aren't the same. Then there are a few junk sites which seem to be promotions by binary option dealers.[9][10].

Some of the published formulas take into account the time value of money, but the binary options business seems to be based on such short time periods (minutes, and in some cases seconds) that there's no need to add that complexity. --John Nagle (talk) 18:46, 13 July 2014 (UTC)

This article is amateurish analytically. I tried cleaning up as I spotted a few inaccuracies and moved away to clean up other articles. Limit-theorem (talk) 00:10, 15 July 2014 (UTC)

Advertising Links on This Page

I and a few others have been reverting attempts to advertise for services here, either from IP or new name. This page may require some vigilance. Limit-theorem (talk) 21:30, 11 January 2015 (UTC)

The same person seems to return with different IP addresses. Limit-theorem (talk) 16:40, 2 April 2015 (UTC)

Just rolled back an edit by a new user who'd inserted a promotional link. Keep watching, please. --John Nagle (talk) 17:47, 30 April 2015 (UTC)

Nonsense sentence

I've removed this sentence and will remove it again. When buying a binary option the potential return it offers is certain and known before the purchase is made. It's nonsense in a purely mathematical sense: a "certain potential return" could mean almost anything, or nothing at all. As a matter of fact there are three potential payoffs, $0, the return of the premium, or a constant positive amount (defined by the specific contract). There's nothing certain about the payoff (or return). In general using the word "certain" here suggests a low risk, which is at best misleading. Smallbones_(smalltalk) 23:34, 1 May 2015 (UTC)

Glad you spotted it. It makes no sense. He probably meant that the payoff, being binary, takes only a single value. But it is obvious from definition. Limit-theorem (talk) 00:46, 2 May 2015 (UTC)

"Vanilla Options"

I feel that there should be some definition of the term "vanilla options" or a hyperlink to a page explaining vanilla options. While I understand it, the meaning is not immediately obvious to the user coming here to find out about binary options. — Preceding unsigned comment added by Jennyeve (talk • contribs) 07:54, 23 September 2015 (UTC)

Hello @Jennyeve: That section is currently unsourced, so if you can find an independent reliable source to reference and clarify the section that would help improve the article.

"Vanilla" means simply "regular" in this context. There is no need for complications. Limit-theorem (talk) 12:00, 23 September 2015 (UTC)