Last Updated: 2026-10-26
“Bitcoin above $100,000” is an incomplete contract description. Does the price have to touch that level during a month, close above it on a named exchange, or exceed an index at one particular second? Those questions have different payoffs. This guide is a worksheet for comparing them, with synthetic calculations rather than personal profit claims or a suggested position.
Start with the settlement record
Save the full question and market identifier, the observation source, threshold, inequality, timestamp and time zone. Record the rules for missing prices, venue outages, delayed announcements and disputes. A chart from another venue is not necessarily evidence for the named settlement source.
Scroll sideways to see every column. Keyboard: focus the table region and use the arrow keys.
| Question type | What has to be observed | An easy mismatch |
|---|---|---|
| Price at a deadline | The specified price/index at the specified time | Using a daily high instead of the final observation |
| Touch before a deadline | A qualifying observation during the stated window | Treating a later fall as undoing an earlier touch |
| Regulatory action | The precise decision and authority in the rules | Confusing a filing, approval and effective date |
| Exchange listing | The stated listing or trading condition | Counting an announcement when trading must begin |
Use the actual rules and resolution documentation, not a shortened headline. A fully paid binary share can still lose its entire purchase cost. A defined payout does not remove settlement, custody, platform or liquidity risk.
Translate money into shares before calculating a move
Synthetic example: $5,000 buys 10,000 shares at $0.50 before costs. A sale at $0.53 yields $5,300, so the gross gain is $300, not $150. The three-cent change applies to each share, not each dollar invested. At an entry of $0.25 the same $5,000 would buy 20,000 shares, and a three-cent move would mean $600 before costs. Neither quote establishes that the entire quantity can be filled.
For a $1-or-$0 binary payout, quantity times entry price is the purchase cost. Quantity times sale price minus purchase cost is gross sale P&L. At resolution, winning shares pay the defined unit payout and losing shares pay zero. Add actual fees and other attributable costs separately; do not subtract a spread again after already using the executed bid and ask.
The official order quickstart describes the CLOB order workflow. The fee page, checked on the date above, describes fees on some markets; this guide does not assume zero fees. Look up the specific market's parameters and inspect the execution record. A displayed midpoint, a limit order that never fills and a completed trade are three different observations.
Nested thresholds are related, but not interchangeable
Suppose A pays if the same terminal price is above $100,000 and B pays if it is above $120,000. The dates, source and observation must match. B implies A; A does not imply B.
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| Terminal price | A payout | B payout | A minus B |
|---|---|---|---|
| At or below $100,000 | $0 | $0 | $0 |
| Above $100,000, at or below $120,000 | $1 | $0 | $1 |
| Above $120,000 | $1 | $1 | $0 |
If a coherent model assigns A probability 0.60 and B probability 0.40, their difference 0.20 is the unconditional probability of the middle interval. The conditional probability of that interval given A is 0.20/0.60, or 33.33%. Market price differences are not automatically either true probability: executable sides, fees and model uncertainty still matter.
A lower threshold priced below a higher one is a prompt to inspect both contracts and order books. It is not a finished arbitrage until the complete portfolio, financing, fill sequence and every settlement case have been checked. In particular, a “touch by Friday” contract and an “above at Friday's close” contract do not have the same event set.
Options prices need a model bridge
A call option's payoff above strike grows with the terminal price; a binary contract's payout is fixed. An implied-volatility surface can be used in a model to estimate a distribution, but its prices reflect pricing assumptions and risk compensation. They are not direct observations of real-world probabilities. Document the forward, maturity, discounting, volatility inputs and model before comparing a derived binary value.
If the event is a barrier touch, a terminal-price distribution alone is insufficient: paths and monitoring rules matter. A model that matches European options need not correctly price the chance of touching a level first. Keep this as a research comparison unless the missing assumptions can be justified. A gap between two screens is not proof of a repeatable edge.
A binary downside position is not a complete spot hedge
Assume an illustrative 0.1 BTC holding bought at $100,000, plus 1,000 binary shares costing $0.10 each. The shares pay $1 if the same terminal BTC price is below $90,000. Total initial outlay is $10,100 before costs.
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| Terminal BTC price | Spot P&L | Binary net P&L | Combined P&L |
|---|---|---|---|
| $95,000 | -$500 | -$100 | -$600 |
| $85,000 | -$1,500 | +$900 | -$600 |
| $50,000 | -$5,000 | +$900 | -$4,100 |
The binary has a cliff-shaped payoff; after it pays, a deeper spot loss is not offset further. A touch condition would change these rows depending on the path. A leveraged perpetual adds margin, funding and liquidation mechanics: liquidation may occur before the binary settles. An eventual payout is not collateral available in time to prevent it. No universal hedge ratio follows from this table.
Test the combined decision before a trade
For the same contract's complementary YES and NO shares, equal quantities would pay the unit amount if the rules guarantee exactly one winning outcome. If 1,000 pairs cost $980 and all costs are $10, the residual against a $1,000 payout is $10. That calculation assumes both legs fill at the stated prices and the complete settlement condition holds. A partial fill leaves directional exposure; a gross price gap can disappear after costs.
Keep a paper record with the market IDs, rule snapshots, quote times, intended quantities, depth and maximum acceptable costs. Write the scenario that makes each leg lose, including a failed hedge or delayed payout. Correlated BTC, ETH and exchange-event positions need a shared scenario review rather than a count of different tickers. Use limits appropriate to your own constraints; a quarter-Kelly calculation with an invented probability is still an invented allocation.
Check product eligibility before using a venue. This worksheet requires neither a deposit nor a live order. For a general rule comparison, see the election-contract guide; the same discipline applies even though the evidence sources differ.
Educational analysis, not financial advice. All numerical positions here are synthetic. Direct documentation links are not affiliate signup links. No tested return, universal fee rate or tax advantage is claimed.