Hedging Calculator for No-Touch Binaries

When trading no-touch binary options based on currencies, it is possible to hedge your contract with a spot FX position. It will not give you “free money” or result in some huge profits, but it can mitigate some risks if you are unsure about the behavior of your underlying currency pair. To hedge a no-touch option you buy spot pair if binary strike price is above current rate, and you sell spot pair if binary strike is below current rate.

This calculator can be used to calculate position size for your hedging trade and also to show you all the possible outcomes of the hedged option/spot trade. There are four hedging models supported by this calculator:

No hedging. No position size to calculate – it will just show the win/loss results for your binary option. Use it if you are feeling certain that currency pair will not reach the strike level.

Simple hedging without stop-loss. You enter the hedge trade simultaneously with buying a binary contract. You set take-profit to strike rate and you do not set any stop-loss at all. The position size is calculated so that take-profit reward is the same as the cost of your binary option. Use this method if you believe that there may be a sudden spike in price, but the currency pair will not move too far against your spot trade.

Simple hedging with stop-loss. The same as above, but you set some stop-loss based on technical or fundamental analysis of the market situation. Use this method if you believe that there may be a sudden spike in price and you are afraid that the currency pair may end the period too far from your spot entry trade.

Conditional hedging with stop-loss. The same as above, but you close your binary option trade as soon as stop-loss is triggered. Since the option will be “in-the-money”, it will offer some profit to cover the stop-loss. Use this method if you believe that there may be a sudden spike in price, you are afraid that the currency pair may end the period too far from your spot trade entry, and you do not want to risk the price hitting your now unhedged strike rate.


If you are interested in spot Forex trading, but do not know where to start, we recommend EarnForex.com as your learning resource.

Binary options trading involve risk. Although the risk of executing a binary options open is fixed for each individual trade, it is possible to lose all of the initial investment in a course of several trades or in a single trade if the entire capital is used to place it. It is not recommended to base your investment decisions on any information presented on or originating from BinaryTrading.com. By browsing this website you express your acceptance of the terms of this disclaimer and that BinaryTrading.com cannot be deemed responsible for any losses that may occur as a result of your binary option trading. BinaryTrading.com is not licensed or registered as a financial consultant or adviser. BinaryTrading.com is neither a broker, nor funds manager. The website does not provide any paid services. All content of BinaryTrading.com is presented for educational or entertainment purposes only.

General Risk Warning: Trading in Binary Options carries a high level of risk and can result in the loss of your investment. As such, Binary Options may not be appropriate for you. You should not invest money that you cannot afford to lose. Before deciding to trade, you should carefully consider your investment objectives, level of experience and risk appetite. Under no circumstances shall we have any liability to any person or entity for (a) any loss or damage in whole or part caused by, resulting from, or relating to any transactions related to Binary Options or (b) any direct, indirect, special, consequential or incidental damages whatsoever.

BinaryTrading.com is compensated partially through the affiliate commission earned from some of the listed brokers.

© 2012–2017 Binary Trading.
0Shares
Binary Trading