What is a Call Accumulator in Binary Options? | Definition


The binary options call accumulator, an advanced version of the eachway call, is a binary options strategy that, when purchased out of the money, provides speculators with exceptionally high rewards for accurate predictions.

Therefore, traders can use it as part of their binary options trading strategy to make profits in trading.

Call Accumulator in a nutshell

  • The call accumulator is an extended eachway call that offers high rewards for accurate out-of-the-money predictions.
  • Traders use them in binary options strategies by adjusting the risk by varying the strike price and leverage over time.
  • The call accumulator minimizes the risk one day before the expiry date and is beneficial for both traders and market makers.

What properties influence the binary options call accumulator?

The binary options call accumulator is influenced by the passage of time. As with any individual call option, this strategy can be more or less aggressive regarding the tunnel delta. The risk can be adjusted by decreasing or increasing the distance between the strike prices. The gradual increase in the settlement price contributes to the delta profile.

Since the strategy is a weighted average of the individual binary call options within the binary options call accumulator, the profiles correspond to each other until there is only one day or less left until expiration.

Why is the binary options call accumulator strategy less risky close to expiration?

The binary options call accumulator provides a consistent profile for the strategy with only one day until expiration. Only with few days to expiration does the profile look anything like the expiration profile. As a result, this strategy is much less risky for both the market maker and the speculator who buys it out of the money.

The reasons for that are simply. When delta is not high, it implies directional risk at the start of the trade. Second, when the Vega is low and the maximum incremental change at expiration is only 30 (above the upper strike), it significantly reduces the pin-risk. Without these risks, the market maker will likely set very competitive, tight bid/ask prices.

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About the author

Marc Van Sittert
Marc Van Sittert is an experienced Binary Options Trader and coach who is originally from South Africa. He started his career in 2014 by trading old-school Binary Options online. His main focus is on short-term contracts with 60-second trades.

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