Financial betting refers to the wagering on the price development of a financial instrument at some later date relative to the current price or level of the instrument, against odds offered by a bookmaker. Maximum potential pay-off of the wager is known when the bet is taken and as a corollary risk is known beforehand by being limited to the initial stake.
Financial betting instruments are a type of digital option. The outcome of the wager at settlement is binary, that is, either a win or a loss. Settlement is executed in cash and there is no delivery of the underlying asset. At any point in time prior to the settlement date bets can often be sold, allowing for possibilities to bet on the accuracy of a market move within the fixed limits of zero win (loss of the stake) and maximum potential win. A fee might sometimes be charged for this service.
The main difference between financial betting and speculation on financial markets using products such as financial spread betting is that the bet must result in a simple binary win or loss based on an event on the underlying financial instruments. This triggers a fixed payout for a win, while with spread betting the payout or loss varies with the price level of the underlying instrument.
Basis in financial theory
Odds have to be consistent with the real-time pricing of the underlying financial instruments listed on foreign exchange markets or securities exchanges in order to avoid arbitrage opportunities (although this might not be possible because of limitations on shorting, i.e. laying bets). Calculation of the odds therefore draws on the Black–Scholes formula for pricing options. Using some variation of the model to solve for volatility, from observed market prices of traded options, gives implied volatility. Implied volatility is forward looking, that is, it can be used to estimate the odds for future price movements using mathematical algorithms.
WinningFT is an interactive online gaming company focused primarily on offering sports betting products and services to certain Asia Pacific and European markets through several brands. Founded in 2004, WinningFT is licensed and regulated by First Cagayan Leisure & Resort Corporation for the Cagayan Economic Zone Authority of the Philippines Government, the Government of the Netherlands Antilles on the island of Curaçao, and the Government of Costa Rica.
– 10 Years Of Trusted Gaming Fairness.
– Transacted Over 11 Billion Successful Bets Since 2004.
We provide a wide range of betting and gaming products in Sports Betting, Live Dealer Casino, Slots & EGaming, Lottery, Poker and Financial Betting to over 100,000 customers globally. The management and corporate officers of WinningFT have 15 years worth of experience in sports trading under the interactive online gaming industry. Today, WinningFT is regarded as one of the pioneer online betting and gaming operators in the Asia Pacific and European markets.
Our philosophy drives our mission in growing our business by seeking to successfully deliver the best overall experience in the market to our sports betting and online gaming customers.