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Japanese Binary Options Review Feb 2016

Month-on-Month Volumes: Down 14.4%, Year-on-Year Volumes: Up 28.6%

Total Volumes

The FFAJ report on Japanese binary options volumes for February 2016 shows a drifting market with volumes declining from Jan ’16 while still showing a substantial increase from Feb ’15. The cumulative volume for the first two months of 2016 is 118.78, a slight improvement from the first two months of 2015.

Japanese Binary Options Review Feb 16

Fig.1 – Binary Options Volumes 2014-2016

The exuberance of the first four months of 2014 seem a long time ago with Apr ’14 volume being just under 300% of the average volume of 2015.

Volumes by Currency

The major pair is as usual the USD/JPY with the EUR/JPY showing static growth while the GBP/JPY declined from Jan ’16 to Feb ’16.

Japanese Binary Options Review Feb 16

Fig.2 – Japanese Binary Options Volumes by Currency

As Brexit approaches and the scaremongering campaign of Cameron’s ‘Remain’ campaign is attacked by increasingly aggressive ‘Leave’rs, the referendum looks to be on a knife edge with polls showing the Remain lead has significantly deteriorated since the New Year, and these were polls taken before the Brussels atrocity. The more the referendum looks in the balance the more volatile the pound will become so the GBP/JPY may provide a valuable fillip to the Japanese binary options market.

Active Account

The number of Trading Members has been static at eight over the last eleven months, unfortunately over the same period the Active Accounts has fallen.

Japanese Binary Options Review Feb 16

Fig.3 – Active Account & Brokers

In fact the number of Active Accounts is lower than it was in Sep ’14 which is a desperate indictment of the market bearing in mind this market should be at its exponential growth stage at present.

Churn’n’Burn ‘Em

Below are three graphs showing the percentage of winning accounts per month:

Japanese Binary Options Review Feb 16

Fig.4 – Binary Options Percentage of Winners

The above graph illustrates the percent of winning accounts and if one excludes JFX from the equation, the seven other outfits are showing an average of just under 25% winning accounts, i.e over three quarters of their accounts are losing money. So JFX should stand up and take a bow since they are the only broker not absorbed with the scumbag behavior of ‘churn’n’burn ‘em’. One hopes that JFX is bucking the trend with respect to Active Accounts and is seeing a growing client list.

Japanese Binary Options Review Feb 16

Fig.5 – Touch Options Percentage of Winners

 

Japanese Binary Options Review Feb 16

Fig. 6 – Range Options Percentage of Winners

In the case of Touch and Range options JFX can sit back down as they are clearly too scared to offer them! Maybe the fair returns they are offering on binary options is not out of a fair-minded attitude but simply incompetence. But on that basis most of the brokers should be considered grossly inept, especially since FX Trade has been the only consistent offerer of a volatility trade, i.e. the Range options, aka Tunnel options. At least YJFX are also now having a go.

Summary

The lack of broker participants in the Range and Touch markets is evidence of a deep lack of understanding in pricing these options, and subsequently risk-managing them. Until the brokers take a more professional approach to providing these dexterous options the market will continue to stagnate.

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