Betfair Official Blog

Beginners This Way Please - Lesson 2

This week - an explanation of binaries. Not as boring as it sounds...

So what the hell is this binary betting all about? (I imagine our so-called competitors do not begin their 'how-to guides' with such industrial language.) Well this lesson, number two in our series that has quite literally captivated the nation, will explain what a binary bet is, leaving you fully equipped to begin your binary trading at the end of it. OK - stop slouching and pay attention at the back.

The first piece of good news is that you are able to use cash floating around in your Betfair account for binaries - no new accounts, no transferring - just betting. The second piece of good news you need to know is that there is no bad news.

The best way to view binary bets is that they are more akin to fixed odds than to a more complex method of betting. As with traditional betting, there are only two options; the bet will either win or it will lose. As with traditional betting, you are aware in advance of the maximum amount you could win or lose before you place the bet.

As with the Betfair exchange, binary betting gives you the flexibility to either back or lay, or buy and sell as we at binaries say. If you think something is going to happen, you buy it. Alternatively, if you don't fancy it, sell. As Tradefair Binaries uses the same groundbreaking exchange technology as Betfair, the buy and sell prices should be the best available, just as Betfair exchange prices tend to be. As with Betfair, if you do not fancy a price, or think it offers poor value, you may request a buy/sell price and wait to get matched.

So how can we calculate winnings/losses? View prices as a percentage; the higher the price, the greater the likelihood of the event occurring. Binary bets settle in one of two manners - if it happens, the market settles at 100%, if it doesn't, the market will settle at 0%.

Example 1: If you think the FTSE will close up on the day, select the FTSE daily market and place an order to buy. If the price you buy at is 60%, and the stock exchange heads North (hence the market settles at 100) you will win 40 times (100-60) the stake you place, which can be as little as 10p. However, if the FTSE fails to rise, the market will settle at 0 and you will lose 60 times (60-0) your stake.

Example 2: If you think the price of gold will fall today, select the Gold Daily market and place an order to sell. If for example you sell at 28, and the price does indeed fall (hence the market settles at 0), your winnings will equal 28 times your stake (28-0). Conversely, if the price rises (and the market settles at 100), you will lose 63 times your stake (100-27).

You will be informed prior to placing the bet what your potential winnings and losses are. So don't panic!

There is currently a nice array of binary bets available on our site, including daily bets on the price of oil, gold and silver, daily currency exchange bets covering four currencies, as well as the opportunity to add your voice to the mountain of speculation surrounding monthly interest rate changes across the suits in the central banks across Europe, America and the United Kingdom. However the staple of our binary system, and our busiest markets, are our equity exchanges. We offer hourly trading across Wall St and the FTSE, and now offer 20 minute FTSE markets too, perfect for the bettor to dip in and out of, without the need to assiduously monitor the markets all day. There are also a variety of markets on the DAX30, NASDAQ100 and the S&P500. Tradefair will of course be rolling out plenty more markets as time goes on. So keep your eyes peeled like an onion.

Next week's lesson will examine binary betting in greater detail, and offer plenty of tips on how to successfully trade in the world of binary betting. But for now, click here to claim your free £10 binary bet, and welcome to a whole new world.