Recently a trader asked about how the Greeks worked with Nadex binaries and he referenced Option Greeks…
I’ve been playing with the expected range indicator, and the butterfly strategy all week. Like Darrel says, pick one strategy and get good at it right! It seems in practice I can pull off some of these trades, but in real trading I haven’t won one time! I’m using the stop trigger plug in to get me out at the current strike if it starts to go against me and I use a take profit of $5/$95 and just put them on during “flat” markets. Any ideas on what I’m doing wrong? It seems like the probabilities aren’t very reliable in nadex. And maybe I should just do the other side of my trades and take a lot less risk in doing so? Maybe use the stop trigger as a take profit instead of a stop loss, basically do the exact opposite trade, than what I have been doing?
I’m just learning nadex, but the “probabilities” do not seem to match up with reality. Also I think my options background might not be helping me here, since I’m trying to do strategies I do every day with listed options, and successfully so, but to no avail with nadex. Is there anything on your website that has explains “the greeks” of nadex options? I saw a few videos on it on YouTube that apex put out, but they were very basic and basically just mentioned them in passing, but didn’t really dig into them. So I have a few “Greek” questions for you…
Volatility - in low volatility, do the strikes Nadex lists closer to the indicia very and in high vol they are further away?
Theta- I’ve heard things in videos mentioning time decay in binary options, but there doesn’t seem to be any in actuality, the ATM strike is always at $50, it doesn’t decay at all, so where is the theta?
It seems like vega and theta aren’t part of binary options, and they are mostly just priced off the delta. I can definitely see how the gamma can give you super fast profits and take them away just as fast. I see the appeal. I’m just not really a chart/indicator type of trader. I don’t want to have to sit in front of the computer staring at charts all day. I like to sell expensive options (ITM in Nadex terms) and let time decay/volatility come in.
Maybe I would have better luck just buying OTM and taking my profit if the indicia I’ve gets close,idk. I’m a bit frustrated as I thought I had a winner with butterflies, even if I’m looking at the charts on NinjaTrader, and the expected range/volume are looking good, I always get hit. I sell one for $20 and buy one for $80, and it just seems to always stop me out. I’m trading currencies at night on the hurled too, not 5 minutes or even 20 min. I thought the hourly would give me a conservative distance, but I always get hit.