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Bungee Bets


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#1 whipsaw

whipsaw

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Posted 09 May 2008 - 04:51 PM

Bungee Bets

The Bungee is a unique limited risk bet that stays 'alive' even when your safety level is breached, giving you the chance to bounce back into profit. Our built-in 'Floor' or 'Ceiling' ensures that the price will not exceed the stated level, however far the underlying market may move.

Bungee bets let you capture favourable price movements in volatile daily markets but with a strictly limited downside. You know that your bet cannot settle at any worse than our Floor or Ceiling level, whatever happens to the underlying market. And because your position remains open even if the underlying market is currently through your safety level, you can still make a profit if the market comes back later in the day.

How do Bungee bets work?
Every Bungee bet has a built-in Floor or Ceiling level, beyond which the Bungee price cannot move. This means that a Bungee Bet is a strictly limited risk proposition.

The Floor or Ceiling of a Bungee works very much like a Stop level, as it ensures that you cannot lose more than a given amount on your position. But there is one key difference: if the underlying market breaches the Floor or Ceiling level, your Bungee position stays open. So if the underlying market swings back to your favour later in the day you can still make a profit. This is especially useful in volatile markets where sudden dips and blips can interrupt the general trend of the market.

Posted Image


Please note that this graph is intended purely to indicate the general relation between the level of a Bungee bet and the level of the underlying market and does not correspond to any actual price data.

On any given trading day we will offer a range of Bungee Buys, with a built-in Floor level, and a range of Bungee Sells, with a built-in Ceiling, against selected underlying markets. For instance, we may offer a Bungee Buy on Daily Wall Street with a Floor of 12900. The price for this Bungee Bet cannot therefore move any lower than 12900, however low the underlying market (i.e. Daily Wall Street) may fall.

If your bet is still open at the expiry time it will be settled at the official closing level of the underlying market, or at the Floor/Ceiling level if the official closing level is currently beneath/above the Floor/Ceiling.

Please note that it is not possible to 'sell' a Bungee Buy or to 'buy' a Bungee Sell, and you cannot place regular Stop or Limit Orders on any Bungee bet.



Example: 'Buying' a FTSE 100 Daily Bungee
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Wichtiger Hinweis für Besucher der Community!

Das Erstellungsdatum des von Dir aufgerufenen Themas liegt bereits einige Zeit zurück. Wir möchten darauf hinweisen, den Inhalt der Diskussion auf seine Aktualität hin zu prüfen. Weitere Informationen findest Du auf dieser Seite.


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