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Binary Options: Fixed Odds Financial Bets by Hamish Raw

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9. Trading Binaries

9.0 Introduction

Futures, currencies, stocks, commodities and bonds, i.e. any instrument that has the characteristic of a straight 45° profit and loss line, permit the speculator to do just one thing and that is take a view on the direction of the instrument…fairly tedious really, they might more appropriately be called blunt instruments! Binaries, on the other hand, not only permit the trader to take a view on the direction but to do so with more or less gearing than offered by the linear P&L instruments. Furthermore binaries can also be used to take a view on implied volatility although these instruments are not ideal for this purpose. And finally, if the trader has neither a strong view on either the future direction ...

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