Now theres one at 87 and this is also another good case to set limit orders. Now this one at 87 is trading at 95-99. If there werent limit orders there on the fill, wed still be in that trade, but would now 00:47:17 have a loser and what wouldve been a potential profitable trade would be showing a loss.Now the other side got filled. Its possible for both sides to get filled. Now that 13 and we set the limit at 40, likely got filled and now its trading around 47. We have three remaining contracts on each side. We could close those out. If the market does this, heres where they settle. This settles at 100. This side settles at 100. All of these conditions were true. They all settle at 100.Heres what happened on that. The 10 that were sold, the 12-16 at 87, seven hit a limit at 60 for 189. Three contracts settled at 100 for a loss of 39 each, again 13 per contract. If we wouldnt have had that limit order in there, the loss wouldve been 390 on this side.Lets look at another alternative though. Lets say that the market had hit both of our limits and then just gone flat and settled actually in between our two strike prices and theyre not quite as good of an outcome, but still a pretty good one. I think a lot of us would take this on any day. We still have to fill on both limits, but now on the remaining three, we lost 39 on each side so 378 versus 78 in losses for net of 300.Now lets look at a worst-case scenario because Im a big believer in always knowing the worst-case scenario, if you couldnt tell already by now because I keep talking about it. If nothing wouldve happened, if the market just stayed flat, both sides wouldve lost for us. Wed have lost 260. Thats the worst-case scenario.Something else I want to mention though because we can close out early, if youre doing a strategy like this lets say around a non-farm payroll report or something like that, if Im a buyer at 13 and a seller at 87, and Im expecting this big move to happen and it comes out, and its a dud and the market isnt doing anything, well, I could sit there and wait. I could let it run till expiration or I could cut my losses.If I bought 13 and the market didnt do what I expected, I still have time value left in this contract. Maybe I sell that one at 8. I take a 5 loss per contract rather than a 13. On the opposite side if Im seller at 87 and nothing happens, maybe I buy that back at a 94 or 95 and just take a partial loss. It might not seem, when were just talking 5, 6 per contract, it may not seem like a lot, but if you look at the lifetime of a trader, if you could take back 5, 6 on every trade, or even on a good majority of them, it adds up over time. We always have to think about that in relation to our trading plan is how much it adds up over time.This was the absolute worst-case scenario on that particular trade. I wanted to share that with you because the markets you put money in, theres risk involved and you need to know every scenario with that. With that on that strategy, Ill take some questions. I can kind of go over what I mean by full collateralization as well. Ill just check with Travis here and see if any questions have come across.Dan: That sounds good, Travis. This is basically just an example of what I mean by full collateralization. Lets say you have a futures market and you have a crude oil contract or even if you have an options on crude contract. Any time youre dealing with margin, for instance, if Im buying a call, Im putting up the full amount. Any time Im buying option, right, Im putting up basically my risk. Thats my collateral. In that case, options are very similar to a binary option.If Im the seller of an option, whats my risk Well, in some cases, that can be undefined. I have to put up a margin to secure that position. Similarly, in the futures market, if Im trading oil, I might have if oils trading at 95 and theres a thousand in it, Ive got a 95,000 contract. Well, if Ive got one side, lets say just putting up 5,000 and the other side putting up 5,000, thats 10,000 total securing a 95,000 contract.The market makes a big move. Well, one side could go into whats called margin call, which cant happen with Nadex, and thats what I want to explain here. If we have a buyer at 33, theres someone selling to them at 33. If this trade is matched, in this case its the US500, which is the underlying of the E-mini, SampP, one contract, 33 points, every point on a binary is 1. The buyer is putting out 33.The seller on the other side, selling at 33. Worst-case scenario is 100, which is the worst-case scenario for any seller on a binary option, puts up 67 because thats their maximum risk. They put up 67. The clearinghouse holds all 100. That contract is now fully collateralized. The total value of that contract, the max payout for the buyer would be 67, which the seller graciously put up. The max payout for the seller is 33, which the buyer graciously put up.Nadex holds those funds. If the contract goes to expiration and if in fact at expiration, the buying area 00:53:28 is greater than 1309, which is our condition, the buyer gets the full 100 and thats all full collateralization means. Basically, the full value of the contract is held with the Nadex clearing house.In this case, one thing also to mention on binaries, if it settles at, which does happen occasionally, if it settles exactly at 1309.000 we do take it out, I wont get into this element, one extra point because we average numbers with the settlement. If it settles right on 1309, the seller, it settles at zero. The reason is that condition was not met. Its not a greater than or equal to. Its a greater than. If it settles right on 1309, it settles at zero. If it settles below 1309, it settles at zero.In this case, the buyer is given the 100, less the 33 they put up, is a net of 67 less the exchange fees. Just to give you an example, if that was one contract, it would be 1.80 in exchange fees, 0.90 cents for the in and 0.90 cents at expiration. The seller gets 0. Now the seller in this scenario, they didnt make any money on the trade. They did pay 0.90 cents to get in, but there was no settlement fee assigned to the seller because their trade was non-profitable. In their case, they didnt get dinged another 0.90 cents.