Many investors, such as those who partake in the risky derivative financial spread betting are often looking for ways to reduce their risk. Many traders will opt to mitigate this risk by utilising binary betting.  

Binary betting is quite similar to fixed odds bets; the market can't rise above 100 or fall below 0  which is one of the main reasons many investors trade in this market.  They will know the amount they stand to lose or gain prior to entering their trade. For real conservative traders, this knowledge provides a way to mitigate risk.   

Binary betting is the ideal trading instrument for spread betters as it extends them the scope of limiting losses along with other spread betting advantages of not having to pay taxes on profits made.

Five popular types of Binary Betting are as follows:

Ladder

Know to be is the easiest form of binary betting, it is the one recommended for new traders in this market. The ladder acts as a predictor of market results if it will finish above or below the level stated at the time set. If the market closes below the level the option will pay 0, if the market closes above the level, it will pay 100. Your winning or losing is dependent on if you sold or bought.

Hi – Lo

This option is when your bet will fall within a certain distance from the day prior’s closing levels.

Target

Placing the bet on target in binary betting is when the trader feels the price in a certain market will fall either out of within the range. A target range can be large, or it can be small. The sell or buy prices will naturally reflect the risk.

Tunnel

The tunnel in binary betting predicts will stay within the given range. If the market prices rise or fall outside of this range prior to the trades’ expiration, the trade is settled at 0. In the event, the market prices stay within said range the trade will be settled at 100.

OneTouch

The OneTouch binary bet is comparable to the tunnel bet with the exception that this bet will only have on barrio price. In the event that the option does not touch the barrier, it will settle at 0. If the market price either goes through or touches the barrier, it is settled at 100.

Binary betting wins or losses are calculated as follows:

 - Selling – Profit, Loss is equal the opening market price minus the market closing market price multiplied by

the per point bet size.

- Buying – Profit, Loss is equal the closing market price minus the market opening market price multiplied by

the per point bet size.

Creating smaller and smarter bets with binary betting is made possible due to these fixed odds.  Which should ultimately mitigate the high risk of financial spread betting.