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Empirical Case Study of Binary Options Trading: An Interdisciplinary Application of Telecommunications Methodology to Financial Economics

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  • Gaetano Giunta

    (Signal Processing for Telecommunications and Economics (SP4TE) Lab, University of ROMA TRE, Rome, Italy)

  • Francesco Benedetto

    (Signal Processing for Telecommunications and Economics (SP4TE) Lab, University of ROMA TRE, Rome, Italy)

Abstract

This paper presents an interdisciplinary application of information & communication methodology to financial economics. The empirical case study reported in this contribution consists of a preliminary example of binary options stock trading. The authors have investigated the performance of a simple algorithm which includes one buy/sell order per week. They have analyzed real sets of historical stock quotes, evidencing the asymmetry of achievable economic returns. In fact, the devised algorithm has denoted a (simulated) overall trading gain in the 87% of cases. A discussion, correlating such trend to the typical behavior of occasional traders, is finally reported

Suggested Citation

  • Gaetano Giunta & Francesco Benedetto, 2012. "Empirical Case Study of Binary Options Trading: An Interdisciplinary Application of Telecommunications Methodology to Financial Economics," International Journal of Interdisciplinary Telecommunications and Networking (IJITN), IGI Global, vol. 4(4), pages 54-63, October.
    • Handle: RePEc:igg:jitn00:v:4:y:2012:i:4:p:54-63
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    Cited by:

    1. Benedetto, F. & Giunta, G. & Mastroeni, L., 2016. "On the predictability of energy commodity markets by an entropy-based computational method," Energy Economics, Elsevier, vol. 54(C), pages 302-312.
    2. Gurdal Ertek & Aysha Al-Kaabi & Aktham Issa Maghyereh, 2022. "Analytical Modeling and Empirical Analysis of Binary Options Strategies," Future Internet, MDPI, vol. 14(7), pages 1-23, July.

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