Bitcoin Forum

I was looking around the community for a  good place for these. Can anybody recommend something? If not I was thinking of creating such a site myself, but it wouldn't be open to the US. Would there be interest in this?

You may ask what is a binary option? A binary option makes a yes/no prediction on some future event. For example, if you think the price of BTC will be over $350 next Tuesday at noon you can buy a Yes share for $50. If that statement is true you profit by $50 (from the No share). Otherwise you lose money on the No share, or vice versa if the statement turned out false. As you can see this opens the door to a lot of potential trading and speculation on many things from Bitcoin to stocks :)

lol Thank you for recommending the forum Gambling section :)

However, binary options are not gambling, at least no more than investing in the stock market in general. They are a new type of financial product similar to Contracts for Difference (CFDs), another contract where you never own the underlying asset, which are useful for different financial options:

http://www.investopedia.com/terms/c/contractfordifferences.asp

https://bitbet.us/


It's already a thing.

Thanks for letting me know about bitbet. I didn't know about them, but they're similar to Predictious (https://www.predictious.com/sports). They both use Yes/No statements about different things. However, they are not finance focused. For example, there is only one item on the price of silver: it's either below $9 before Dec. 2015 or not, that's it. What if I want to say it's above $14.50 tomorrow? Or $14.60 the next day? There are just two BTC price related items. I'm talking about a platform just for finance related items, and ability to be more granular. Traders like to speculate on and make money on small price movements, not general statements. I thought I'd find people like that here, in the Speculation thread. Am I in the wrong place?

If I'm not mistaken, you can create your own new bet on the bitbet site.

I'll try, but there are still a couple problems. First, it's not a financial site. It's outwardly gambling, so it's not meant to attract financial traders. Second, the format isn't strictly binary. It's odds based. For example, the market doesn't expect the statement to be Yes/true that silver will be below $9 by Dec. 2015, so it accordingly pays 4.8 BTC if it's true and only .99 BTC if not. I'm talking about strictly binary. When the option is created a person might select $50 for the Yes/No result. That means it always costs $50 to buy either Yes or No and always pays out $50 if you're correct. This also provides opportunity to sell your option early to hedge. For example, if today you created a $50 option saying BTC would be over $400 at noon December 10, 2015 you might sell it half price ($25) tomorrow if the price started crashing. That way you could only lose a max $25, regardless of outcome, while the option buyer could triple his money.

I don't think what you're talking about, will work.

It would definitely work. As you see there are already sites using a Yes/No format. However, I don't know if people are interested in applying that more closely to finance. It's something I'm interested in, but I don't know if it's only me. This model is gaining traction. There is a CFTC regulated site called Nadex that does binary options, including for Bitcoin:

http://www.nadex.com/trade-binary-options.html

The problem with Nadex is since they are regulated you have to go through a long registration and identification process. There is also not the same flexibility to create the kinds of options I have in mind and you need a min $100 value I think. Their fees are also not exactly cheap. The great thing about Bitcoin is it allows for more peer-to-peer transactions with lower barriers to entry and often low fees with greater flexibility. When you set up a fully regulated exchange there are a lot of regulatory burdens and costs to deal with which are passed to users. That's why I thought about a platform not US based not subject to their restrictions.

You can check my signature if you're looking for a binary website without needing a long identification process but it has only limited options.

Registration: just an e-mail, no id and stuff required

It's actually a great idea, and I would definitely try something out if it is really a YES/NO only binary option. Binary trading, for me, opens up a window for those who doesn't really know how to trade on their own.

Coinut (http://coinut.com) do binaries, as well as European-style vanillas. As far as I know Coinut are the only site to do vanillas, but there are a few sites doing binaries - I've only tried Coinut however (buying and selling - from memory at least one of the binary-only sites only allowed buying options, not selling/writing).

There was a discussion above about whether binaries are gambling. My understanding is that there are differing views - in the UK they were until recently classified as "fixed odds bets", but are now being reclassified as "financial instruments". Other regulatory authorities have different and sometimes contrary views.

Indeed, coinut is a good option if you want to do this.

You can follow my sig to them if you want to check them out.