Site Terminology

BINE – Binary Option. Often written and “bine”.
BOP or “The Program” – The daily management steps undertaken to remove risk from currency trades using binary options on Hedgestreet.com
CME – Chicago Merchanile Exchange
CL – Consensus Levels from Research/Institutionals entities identifying the EST-Time-based support / resistance levels. CLs are manipulated to fit BOP support/resistance levels. You’ll see some of the Categories, RSS feeds and the Blogroll in the sidebar identified in a (XXXX) acronym fashion. These are CL sources. XXXX represents the first four characters of the name of the CL. (e.g. MELL for Mellon Bank)
GO – Globex Option
HCP – Notation for a Hedgestreet Currency Pair [CURRENCY PAIR |-| CASHPRICE / |-| HS BINARY STRIKE EXPIRATION TIME]  The establishment of a binary position againt the underlying cash to achieve some effect. The quotes’ structure enables a visual and future programmable purpose.. 
E.g:
EUR/USD -3010/3000-10AM = 

EUR/USD – Currency Pair
-3010 – Short the Cash Price at EUR/USD $1.3010
3000 = Strike Price at 3000
10am – Expires at 10am.

HE – Horizon Event – the time leading up to and terminating at an economic news announcement
HS – Hedgestreet exchange or for 1 unit of a Hedgestreet contract (“Hedgelette”)
ITM – In-the-Money: The options time premium plus its current contract value at expiration.
OTM – Out-of-The-Money: The option’s time premium minus its contract value at expiration.
SLP – Sponsored Link Product – use advertising revenue as a hedge instrument. Email binaryoptions at yahoo dot com.
VIX – refers to general volatility, not the VIX index itself.
WIP – Work-In-Progress – BOP applications under development.

Filed under: FAQ

Introduction to The Binary Options Program (BOP)

Binary Options are currency binary option instruments for FX traded currencies on Hedgestreet.com: This blog (“the Blog”) is provided as a “program”. Its currently focused on the EUR/USD Binary. The audience for the Program is intended for financial engineers (hedge fund managers, institutions, currency specialists, prop shop participants). Normally there is confidence that the Program will suit the needs of this profession. The Program is market neutral, merely identifying highly probable trades regardless of the economic environment. The Program uses binaries in conjunction with widely published levels of support and resistance to identify trades in cash.  

The Program follow some general principles:

Observation #1: Long-term indications preceding a market event risk (i.e. economic figure announcements – a “Horizon Event” (HE) forms. These promote support and resistance levels. After the HE passes, new support and resistance levels are calculated by the market. It is up to the individual where to apply their own indicators before and after these HEs. Usually, if after the HEs, the S or Rs are broken, they are either to cover cash-stop losses that are not closed, or to capture a VIX point. (see below)

Obervation #2: The probability is larger for wider VIX sessions to lead into Small VIX in later sessions. (A typical strategy is long OTM binaries against short ITM binaries). This takes advantage of depreciating time value on end-of-day binaries and locks profits against cash positions early-in-day.

Timing of The Program: Due to the increased risk using BOP, the program normally takes positions first in FX cash, then HS, then cash again. If cash achieves pre-determined profit targets, moving stops are employed and new positions are considered. After X amount of Time (a “horizion loss”), binaries are sold or purchased in order to exit the underlying cash position at a net profit of both positions, or move the stop-loss lower than the binary support or resistance. This is done normally a low VIX, news-absent environment. If net is negative at the binary’s expiration, BOP pairs the cash loss against the appropriate European-Style CME Globex put and call around the corresponding currency’s near-term futures, structured around the loss. (Long Put X > Price Loss < Long Call X) These losses are subsidized by gains in the CME and/or gains in the binaries

Filed under: FAQ