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Thinker

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  1. Hi, I have just "discovered" the Australia 200 daily calls and puts as well as the Dec (I presume these are monthly) calls and puts. Could you direct me to the "rules" surrounding these.... ie expiry times, margins and everything regarding them etc please. Y have tried to use the searching facility and find it frustrating as I have found nothing to help. Thanks. Regards Lindsay
  2. Thank you, Tim, for referring my comments to James and thank you James for your response. My comments in my post relate to the Aus200 and not necessarily ALL index binaries and it is those binaries (the 20 min and 1 hour) that my comments specifically relate to. So you will see in the Aus 200 count down clocks that the trading ceases about 6 to 8 seconds before the 1 minute cutoff. However, things such as spreads and other general comments can be applied to Wall Street and the Germany 30 indices as well. I appreciate your responses and my comments are made as a trader who actually uses them in practice which is the benefit of these forums as the feedback from those who are using them in practice is the only way you can be made aware of problems or issues. I am not quite sure that the time in processing the data to the charts can be the only reason for the differential in pricing between the percentage change column in the tables and the figure on the charts. The reason for this is that even as I was typing this response I was watching the graph compared with the table and at one point there was approximately 10 points difference when the table went to approximately 5084 and the chart was at 5074. When the market turned down, if it was simply a delay in processing of the data one would have expected the chart to eventually reach 5084 before turning down, however, it didn't but retraced after reaching approximately 5078. For this reason it makes me think that it is a difference in computation. Hopefully the above is of assistance to you. The main benefit of binaries, of course, it the ability to limit risk.
  3. Yes, It would be good to be able to compare nots and trading ideas......
  4. Hi Tim, My apologies for being so long in replying to you, however, I have been away. There are a couple of points that I would like to clarify or add to. Spreads I understand the point you are making on this topic. But of course traders always like to see the narrower spreads and if there is anything that you can do to achieve this, it would be much appreciated. The Percentage Change Figures in the “Prices” Window Thank you, we would be good if you could fix these issues. Closure of Binaries before Expiry When I was referring to the time that the binary closes and that it closes six or eight seconds prior to the designated closure time, I was referring to the countdown clock that IG has on its dynamic charts of the binaries referred to above. In other words it is your own clock that shows that the binaries are closing early, not my clock or my computer clock. Final Pricing (Settled Basis) I am not sure that you have commented very much on this topic. There are a number of points I was making. Broadly they are: The I G Price showed on the binary graphs is very often different to the binary price given in the prices tables under the heading "% change". The point I am making is that if your own calculations produced two different prices in two different places how can one expect to be able to know what the estimated price is? Which one of the two different figures is correct or is this need for solving a problem here? I don't dispute the need, and in fact I agree with it, that independent pricing for the “settled at” pricing is required. What I am saying though is that if you can't provide a live price from Bloomberg maybe some other supplier such as Morningstar can even if it is also in conjunction with the estimated price. You would then have to use Morningstar's closing price as the appropriate settlement figure. The point I am making is that there is one estimated price on your binary charts, a different one on the binary tables and the final settlement price with Bloomberg. It makes it hard to trade when there are three different figures for the index value. I would appreciate it if IG could look into negotiating with Morningstar to provide their price even though it may only be updated every 10 or 20 seconds or so. Having the real price at which the binary is settled at being constantly in the prices tables or somewhere on the chart would certainly add to the transparency of using an independent pricing authority. Of course appropriate acknowledgements to Morningstar would be appropriate. I am quite happy to speak with anyone from IG if they need clarification on any of the issues regarding the binary trading, particularly in relation to the Australia 200. My attitude to these sorts of things is that it is really only the people who use the product that can see the difficulties involved and the more people who can help solve them, the better. Thanks.
  5. I have been trading index binaries for quite some time now. I have traded the Germany 30 and Wall St. but mainly the Aus Index. I have been concerned now for some time regarding pricing, timing and charting included in the binary information. For the purposes of this discussion I will refer exclusively to the Aus Index. Apologies in advance for the length of this, however, I have been attempting to trade the binaries for quite some time with some degree of success but also failure in certain areas. I have provided as much detail as I possibly can so that my areas of concern can be addressed. These are the concerns that I have: 1. The spread. I understand the need for a spread, however, the amount of the spread seems to me to be somewhat random and, frankly, far too wide. Given that the price will vary between zero and 100 I have often witnessed spreads such as 18 and 27, a nine-point spread (and sometimes greater). When looked at as a percentage nine as a percentage of 18 is 50%. This is a very significant spread. It seems to me that most often the spread is in the vicinity of 7 points. I query why it is necessary to have such a large spread particularly when you have a pricing of, say, 1 and 8. Given that 4.5 is the median point why could the pricing not be, for instance 3.5 and 5.5. Two points is still a significant percentage spread in such a market. Times of extremely high volatility can obviously affect spreads but in a highly traded market even volatility should not affect the spread. 2. The percentage change figures in the "Prices" window. There are two markets for binaries on the Australian index, the 20 min market and the hourly market. The first thing is that there is a lack of consistency in the prices window for these two markets. In the hourlies the "percentage change” column has an indicative digital figure of the index such as "5234.5” but in the 20 min market the "percentage change" column has a figure such as plus or -2. The hourly market also has a plus or minus figure in the "change" column. The only exception to this is between midday and 1 PM where the "percentage change" column of the 20 min market has the same as the hourly market, an indicative digital figure of the index. At all other times of the day the "percentage change" column of the 20 min binary just has a plus or minus figure not an actual price estimation of the index. Interestingly, in the 20 min market the "change" column and the "percentage change" column has slightly different figures in that the percentage column is to 2 decimal places. However, if you look at the relatively recently created charts for the binaries they have a moving line and a digital figure corresponding with the value at any particular point. I have noticed, however, that this digital value can be significantly different to the digital value given in the prices screen when presumably both are supposed to be indicative figures. I cannot for the life of me understand how or why these two figures could be different. I have seen a variation of up to 14 points in times of high volatility and even five points when not so volatile. Given that the strike prices may be as little as five or seven points apart this is a very significant error in the representation of the price. Let's face it one of the two prices has to be wrong if not both. I believe that it is so significant that one or other or perhaps both of the indicative prices are effectively meaningless. One cannot tell which one could possibly be correct. In fact I have seen on the chart a particular price a second before the expiry of the binary to be a particular figure and then the close price can be up to 3 or four points different where there appears to be no significant move at the time in the underlying market. Given that one 10th of a point can make the difference between a binary expiring at 100 or zero I believe that these figures should be more accurate than just merely some approximation. The other interesting point about the indicative prices given is that they are not the Bloomberg prices which is the price at which the settled price is determined. They are some compilation of an indicative feed of the SPI and other factors as I understand it from IG support. 3. Closure of binaries before expiry. The 20 min binaries and the hourlies close 1 min before expiry. I have noticed, however, that they very frequently close a few seconds before the 1 min. I have seen them close up to 6 or 8 seconds early on a very regular basis and have on a number of occasions been locked out of closing a trade with a few seconds to go. It is completely unacceptable if the "rules" state that the market closes 1 min before expiry but it in fact closes 1 min and 6 seconds or 1 min and 8 seconds before expiry. That sort of thing should never happen but it does happen constantly. A market should not be closed before it is actually supposed to be closed. 4. Final pricing (settled basis). The final settled price is supposed to be the price as reported by Bloomberg. However, in discussions with IG support they have informed me that they could not afford to provide the streamed Bloomberg figures during trading. I agree with the underlying premise that an independent authority (such as Bloomberg) should set the final settlement price. However, I do not believe that you should have a situation where that authority’s figures are not available on the same trading platform to be viewed during the course of trading. The indicative figures as stated above have no real bearing on the Bloomberg figure. To this I say there are many different authorities (for example Morningstar) who could set the final price for the purposes of the IG index trading but I am sure that they would be prepared to negotiate a very reasonable fee (if Bloomberg isn't) to provide the feed to IG so that it could be displayed in conjunction with the binary prices so that it is quite clear what the real and actual price is rather than some inaccurate conglomeration. 5. Summary. In view of all the above I am not at all convinced that the provision of the Aus Index as a binary product is a product of merchantable quality and therefore should not be represented as such. I do believe, however, that if substantial changes are made such as some of those indicated above, the product could be a good product. At the moment I don't believe that it is. All products sold or available for sale in Australia are required to be of merchantable quality under the provisions of the Competition and Consumer Act 2010. I don't believe some of the index binary products are. I believe that changes as described above need to be made or I believe, unfortunately, the product should probably be withdrawn until such time as it can be fixed. I would like to keep trading them but I think I and anyone else would be a fool to do so believing that they would make a profit over time given the uncertainties and anomalies.
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