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Video Binary Options Price & Time (Binary options nadex strategy presentation)

Video analyzing the impact of time erosion on the price of a binary options. Taking a look at examples and the relationship between pricing and probability.

welcome to this Nadex binary options Masters Series
price and time during this brief video tutorial
we'll take a look at the impact that time or time erosion has
on the price of a binary option
so if we remember the price could be thought of as reflecting the
probability of an event occurring
and is constantly moving so the price of a binary option
as the underlying market moves as time errodes
is based on the probability so that's what we're gonna be focusing on if we
take a look at an example
we may have a 75 bid 77 offer
if we take the midpoint between those two we might say that
the market's view was there's a 76 percent chance
of that event happening
now it's important to note price does not have to move in linearity
with the underlying market as a matter fact the price of a binary option can
move
even if the underlying market is flat we're gonna take a look at a couple of
examples of that
so it is important to note that not just the movement of the underlying
but also timed expiration and volatility
can impact the price of the option
one of the best examples again is a flat market
here we have eur/usd the candlesticks represent the underlying market so we
have EUR USD greater than 14500
that's represented by the Green Line on the screen
so we can see the price is trading underneath the price here indicates the
total life of the binary
know when it starts out early in the option
we have a

lot of time and so we might see a bid off of 4246
as time errodes the probability
decreases that price will move over the strike
and so as even though the market is flat
we see that time is erroding and so the probability is decreasing
and therefore with a binary where the underlying market is moving
flat below we'll see price continue to decrease
until finally it settles 0
if we look at another example the same strike eur/usd crater than 14500
again the candlesticks represent the underlying market for the life of the
binary option price in this case is
over the strike when we start out we may have a bid offer 52 56
the market moves it stays pretty much
flat though there's not really a great deal change in the underlying price
however time has continued to errode
probability for price dipping below has lessened
and so we see a higher probability in the actual binary expiring
over the strike again as we continue to move to the right we see the binary is
increasing in value
even though the underlying market is absolutely flat until finally
the event the statement is true and it settles at
100 this has been a very basic example so if you have additional questions
or would like more information you can check out
wWW dot nadex dot com give us a call at 877
77 Nadex or you can also email
customer service at Nadex dot com

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This is usually a string of losses, or a prolonged string of losses to be exact. Every system is subject to losses, they come and go like the wind. There are bad binary options strategies, but there's also bad traders. Managing losses is the key to long term profitability. If you have an uncontrolled, unusually long run, or too many losses to maintain account growth then you have a problem. As I said, this could be simple. Maybe getting a breath of fresh air, grabbing a beer with your pals or having dinner with the wife will help. It could be something more sinister so don't be afraid to take a closer look at what you are doing.

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