) L…

Binary Options Broker Reviews

Mar 3

Down and In Binary Put Options

(Read all the related threads on this page
https://www.facebook.com/BinaryOptionsStrategy/)

Like all knock-ins, down and in-binary put options are not the most useful speculative instruments. Nevertheless, they offer a low-cost alternative for theoretical exposure to the markets. Binary put options with a barrier lower than the underlying include a knock-in and convert into binary put options when it reaches the barrier.
Down and binary put options are attractive when the barrier is lower than the strike price.

(Got a Question? Join our Telegram Group
t.me/BOproFAQ)

The binary put and down options where the barrier is above the strike are of particular interest because the profile of the knock-in price is very similar to the binary option it would convert into.

=> Down and In Binary Put Options example

In our example, we assume wheat in a down position and binary put options with expiration dates of 2, 4, and 25 days and implied volatility of 35%. The barrier would be 620, and the strike price would be 640. The difference between the 2-day and 4-day knock-ins on the strike price here is similar to that between the 4-day and 25-day knock-ins. However, the 2-day and 4-day knock-ins are significantly cheaper than the binary option at 34.72 and 15.62, respectively.

A significant support level between the barrier and the strike would illustrate the potential of this tactic. Buying the knock-in offers a favorable entry into the speculative position that the support level will be broken.

This is when the support level is halfway between the barrier and the strike. The support level becomes a strong resistance level after the barrier is activated.

The price difference between the binary put and the down and the profile increases as the implied volatility decreases. This difference gradually increases starting from a lower wheat price until it reaches the maximum value of 100.

(JUST CLICK THIS LINK AND SEND US A DIRECT MESSAGE m.me/293825590632893)

#NMBO1431