Exchange Traded Exotics

[deltahedge]

Hey People,

Was curious if anyone could direct me to some exchange traded exotics? I know CBOE does have offer binary (aka digital) options on the SPX with a fixed payout at $1 (look up symbol BSZ), but wondered if any other existed? Thinkorswim used to let people trade those binaries but they have since discontinued it due to the lack of interest :/.

I always thought such options offered some ways in which the typical buy/hold investor (who does covered calls) an opportunity to hedge him/herself against a market correction.

 

[rickf]

I think the binary options were rolled out as "starter options" for newbies ... perhaps for folks who wanted a simple "I think ABC will go up (or down) by expiration." Not sure how effective they'd be for a hedge per se. Not sure what the interest has been on these things though -- I've not really followed them much. As for me, I'm not interested in those binaries, though....the most you can get is $1 payout --- if you're right (or really right) why not get more than a 'base hit' return on your money?

I'm more interested in the weekly equity options they're rolling out... those might be interesting to work with; I'm paper-trading a few now to see how they behave.

If you want to hedge your portfolio, my instinct is to use more traditional options or futures positions. All depends on what you want to accomplish, obviously.