1. GT247.com Guide to Binary Options

2. Why GT247.com Binary Options? GT247.com offers high liquidity real-time Binary Option prices on a variety of underlying instruments at extremely competitive prices 3. Why use Binary Options? A low risk means of expressing a short-term view on the market of your choice Capital that you risk is certain with potentially substantial upside returns Allows you to profit form accurately estimating which way a market will move and how fast it will get there 4. What is a Binary Option? A Binary Option pays out if a pre-defined outcome occurs in the market Should the pre-defined outcome not occur then the capital risked at trade inception will be surrendered 5. What is a Binary Option? A Binary Option gets it name because only one of two things can happen at maturity: Binary has a value of 1 if a defined outcome occurs (or 100 on the GT247.com trading platform) Binary has a value of 0 if a defined outcome does not occur 6. What is a Binary Option? A Binary Option trade may be closed out prior to maturity at which time the option may have a value between 0 and 1 .. But more of that later! 7. How does a Binary Work? Example You think that the market is going to go up from its current level of 44 500 You buy a Binary Option with a strike of 44600 for a price of 15 in 100 rpp 8. How does a Binary Work? Example At maturity the market is at 44 700 and you make a profit of (100 15) * 100 rpp = R 8 500 At maturity the market is at 44 550 and you make a loss of (0 15) * 100 rpp = R 1 500 9. How does a Binary Work? 10. How does a Binary Work? 11. Getting started with GT247.com Binaries First step is to set up the binary instruments that you wish to trade on the Futures Platform A helpful addition is to include the underlying instrument in the binary watchlist 12. Getting started with GT247.com Binaries Following slide shows a watchlist screen shot illustrating 17:00 expiry on the Top40 Futures contract For this underlying future and expiry time there are 8 available strikes that may be selected 13. Getting started with GT247.com Binaries 14. Getting started with GT247.com Binaries The prices of the 8 Binary Option contracts vary based on the likelihood that they will expire with a value of 1 (or equivalently 100 on the platform) Lets spend some time explaining the terminology on the platform. 15. Getting started with GT247.com Binaries 16. Getting started with GT247.com Binaries For this instrument (Top40) and expiry time there are four Up and four Down contracts For example if you purchase the 44 863 contract you believe that the futures market will be trading at or above that level at 17:00 17. Getting started with GT247 Binaries By contrast if you purchase the 44 563 contract you believe that the futures market will be trading at or below that level at 17:00 Selling the 44 563 contract implies you believe that the market will be trading above that level at 17:00 18. Getting started with GT247.com Binaries Binary Options prices depend on the probability of the underlying market meeting the objective of being below or above the chosen contract rate The next slide shows how the market perceives the probability of an outcome at 17:00 19. Getting started with GT247.com Binaries 20. Getting started with GT247.com Binaries Current Time 13:30 Maturity Time 17:00 Current Futures Market 44 980 44 963 Up Contract 56 44 563 Down Contract 0 21. Getting started with GT247.com Binaries 22. Getting started with GT247.com Binaries 23. Getting started with GT247.com Binaries For the sake of simplicity in the previous example the mid-price has been used Actual trades will take place at the bid if the trader is selling the binary and at the offer if the trader is buying the binary 24. Getting started with GT247 Binaries 25. Getting started with GT247.com Binaries Previous two slides demonstrate graphically how the value of Binary Options will vary with changes in the underlying futures market 26. Getting started with GT247.com Binaries Now for the thorny issue of Binary Options that have prices that are not 0 or 1 prior to maturity 27. Getting started with GT247.com Binaries You do not have to hold the Binary Option that you bought (or sold) to maturity. 28. Getting started with GT247.com Binaries You do not have to hold the Binary Option that you bought (or sold) to maturity. 29. Example Purchase 44 600 Up Strike option at 15 in 100 rpp at 09:30 Futures market is trading at 44 500 At 11:00 the futures market is trading at 44 740 and the binary price is 67 Getting started with GT247.com Binaries 30. Example You believe that the futures market may not go any higher during the day and may actually come down before 17:00 Sell the option at a price of 67 and realise a profit of (67-15) * 100 = R 5 200 Getting started with GT247.com Binaries 31. Getting started with GT247.com Binaries Binary Options are a first class trading vehicle for expressing short term views on an underlying market and provide excellent opportunities to trade frequently during the day. 32. Some Starter Strategies Example You believe that the futures market will not be very volatile during the trading day At maturity you believe that the market will be trading not higher than 44 700 and not lower than 44 500 At 09:30 you sell the 44 700 Up Strike Option at a price of 35 and the 44 500 Down Strike Option at 30 both in 100 rpp 33. Some Starter Strategies Example At maturity the futures market is trading at 44650 44 700 Up Strike Binary matures with value 0 44 500 Down Strike Binary matures with value 0 34. Some Starter Strategies Example Profit Calculation 44 700 Up Strike = (35 0) * 100 = R 3 500 44 500 Down Strike = (30 0) * 100 = R 3 000 35. Some Starter Strategies 36. Some Starter Strategies Example You believe that the futures market will be very volatile during the trading day but you are not sure whether the market will go up or down At maturity you believe that the market will have traded substantially away from the opening price of 44 600 At 09:30 you buy the 44 750 Up Strike Option at a price of 20 and the 44 450 Down Strike Option at 25 both in 100 rpp 37. Some Starter Strategies Example At maturity the futures market is trading at 44300 44 750 Up Strike Binary matures with value 0 44 450 Down Strike Binary matures with value 100 38. Some Starter Strategies Example Profit Calculation 44 750 Up Strike = (0 25) * 100 = - R 2 500 44 500 Down Strike = (100 20) * 100 = R 8 000 Total Profit = R 5 500 39. Some Starter Strategies Example At maturity the futures market is trading at 44600 44 750 Up Strike Binary matures with value 0 44 450 Down Strike Binary matures with value 0 40. Some Starter Strategies Example Profit Calculation 44 750 Up Strike = (0 25) * 100 = - R 2 500 44 450 Down Strike = (0 20) * 100 = - R 2 000 Total Profit = -R 4 500 41. Some Starter Strategies 42. Some Starter Strategies Example You have a long underlying futures position in 100 rpp purchased at 44 650 You are a little concerned that the futures market may go lower during the day, but your risk exists only if the market trades below 44 600 You purchase a 44 600 Down Strike Binary in 100 rpp at a price of 25 43. Some Starter Strategies Example At maturity the futures market is trading at 44500 44 600 Down Strike Binary has a value of 100 At maturity the futures market is trading at 44700 44 600 Down Strike Binary has a value of 0 44. Some Starter Strategies Example Profit Calculation at 44 500 44 600 Down Strike (100 25) * 100 = R 7 500 Futures (44 650 44 500) * 100 = - R 15 000 Total = - R 7 500 45. Some Starter Strategies Example Profit Calculation at 44 700 44 600 Down Strike (0 25) * 100 = - R 2 500 Futures (44 700 44 650) * 100 = R 5 500 Total = R 3 000 46. Some Starter Strategies