Profitsee – Future Economic Surivival

Divinations in Forex, Commodities and Economic Patterns

Box or Binary?

I compared a 4pm near-at-the-money 3325 long bine against Oanda’s box option product at 1127 EST when EUR was at 3327. The premium to sell (to hit a price below 3325 on OA’s box) was $45 for a (4pm-4:05pm) compared to the $50 at the same price and time for the HS binary on Hedgestreet.com, representing a 10% difference. You would pick up more premium going with HS for the selling of the bine than buying the box. And these are already factoring in the wide spreads on HS. (Update 2/11/2009: Reading my own post here 2 years later, I assume I was referencing some kind of arbitrage opportunity here)

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2 Responses

  1. Palmer says:

    So is that a typical range for FRO’s/Binaries? I don’t understand using these since it seems like it will leave you very exposed on the stock. Seems like you can lose more than you can stand to gain. is that correct?

  2. Infidelity says:

    Somehow i missed the point. Probably lost in translation 🙂 Anyway … nice blog to visit.

    cheers, Infidelity

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