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Binary Options As A Modern Fenomenon Of Financial Business

Author

Listed:
  • Kolkova Andrea

    (University of Business and Law, Czech Republic)

  • Lenertova Lucie

    (University of Business and Law, Czech Republic)

Abstract

Binary options are a new instrument of the financial market. The aim of this paper is to analyze the use of binary options with trading and to illustrate this on the practical example of trades based on Bollinger bands indicator. Currency pair EUR/USD and 6912 time series values of this instrument will be put to analysis. The contribution will be evaluated 8 strategies based on Bollinger Bands. There will be used a backtesting method. From the results follows the most trades could have been realized with the use of Bollinger bands with a double deviation. This strategy, however, also showed the greatest percentage of failed trades. On the contrary the fewest transactions could have been carried out with Bollinger bands with a triple deviation and the MACD filter.

Suggested Citation

  • Kolkova Andrea & Lenertova Lucie, 2016. "Binary Options As A Modern Fenomenon Of Financial Business," International Journal of Entrepreneurial Knowledge, Center for International Scientific Research of VSO and VSPP, vol. 4(1), pages 52-59, June.
    • Handle: RePEc:jek:journl:v:4:y:2016:i:1:p:52-59
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    File URL: http://ijek.org/files/IJEK_1-2016v4/IJEK-1-2016,v.4_kolkova,a.,lenertova,l..pdf
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    References listed on IDEAS

    as
    1. Zmeskal, Zdenek, 2010. "Generalised soft binomial American real option pricing model (fuzzy-stochastic approach)," European Journal of Operational Research, Elsevier, vol. 207(2), pages 1096-1103, December.
    2. Masatoshi Miyake & Hiroshi Inoue & Jianming Shi & Tetsuya Shimokawa, 2014. "A Binary Option Pricing Based on Fuzziness," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 13(06), pages 1211-1227.
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    Cited by:

    1. Johannes Hendrik Venter & Pieter Juriaan De Jongh, 2022. "Trading Binary Options Using Expected Profit and Loss Metrics," Risks, MDPI, vol. 10(11), pages 1-21, November.

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