The binary Options Eachway Tunnel is a volatility bet. Here, two additional strikes provide three different settlement levels, excluding dead heats.
One example is the “Hang Seng” for an eachway tunnel. The strategy settles at zero outside two strikes, at 100 between the two inside strikes, and at 40 between the inside and outside strikes. For the buyer who assumes the underlying is between the two inside strikes but guesses a little wrong, the binary options for Eachway Tunnel offer a second alternative.
Binary Options Eachway Tunnel example
Generally, the binary options eachway tunnel is low for Put Gamma and Put Delta. The profile from 1 day to expiration is rounded and has not yet taken on the appearance of a “head and shoulders” expiration. When the underlying is near the two inner strikes, the “head and shoulders patterns” profile becomes more pronounced at 0.1 days to expiration, increasing the risk for the trader and market maker. As you can see, Eachway Tunnels can not considered to be risk-free binary trades.
Find more articles in my Binary Options Glossary.
