You cannot replicate a path-dependent exotic (touches) with vanillas. That’s why.
Aren't binary options path independent?
You cannot replicate a path-dependent exotic (touches) with vanillas. That’s why.
Aren't binary options path independent?
For what I understand one can still trade them, without any investor protection.https://www.fca.org.uk/consumers/binary-options-scams
The British love Binary options
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It makes sense, it would quite easy to manipulate a price for five seconds in order to fake an outcome.
Do you see an opportunity if traded as a part of a complex structure, like one touch hedged by a vanilla option spread (butterfly, risk rev)?No, in the sense that they can trade anywhere and all that matters is where spot is priced at exp. PD-exotics have barriers/KOs/KIs. Say you buy a bull touch on AAPL at 175. A digital can trade past 175 but expire below and it will expire at 0/100 while a touch will pay out when it touched 175.
For what I understand one can still trade them, without any investor protection.
They have banned the promotions and the sales from the UK, but I understand a uk customer can open an account with one of these offshore brokers (Malta, BVI) and trade them.
I agree, although some are regulated, just not by the FCA.Of course, you can open an account at your own risk in a tax haven region, but the FCA won't protect your funds, which is the whole point of dealing with a regulated broker.
Some have pointed out cryptos as similar vehicles, so I guess you could treat those brokes in Malta like having an account with Bifinex in Hong Kong. I don't think you would send the majority of your funds there.
Do you see an opportunity if traded as a part of a complex structure, like one touch hedged by a vanilla option spread (butterfly, risk rev)?
Or on their own betting on the one touch?