High-probability terminal binary probability & order-flow momentum analyzer for Nasdaq-100 (NQ) 15m contracts
For an NQ 15m binary option with current spot $S_t$, strike $K$, remaining time $\tau = T - t$, and instantaneous volatility $\sigma$:
At $\tau = 3.0\text{ min}$, the diffusion variance collapses by 80% compared to bar open ($\sqrt{3/15} \approx 0.447$). A 10-point lead becomes mathematically dominant unless a >2.5$\sigma$ impulse occurs.
We adjust drift parameter $\mu$ by institutional order book pressure and aggressive delta imbalances:
When CVD confirms price location above the strike, the probability of mean-reversion in the final 180 seconds drops significantly.
Binary contracts pay 100¢ on resolution or 0¢ on loss. With market ask price $C$ cents:
Fractional Kelly sizing ($f^* = 0.25 \times \frac{b \cdot p - q}{b}$) ensures controlled variance and avoids binary drawdowns during chop regimes.