One-Touch Options

So it seems bottom line is nothing have the exact one-touch effect. But how about double-one-touch with the barriers posited far out of the market? there will be a little loss if the price stays anywhere between the two barriers and large profit if it touches one of them. So suppose I still want to get an effect as close as possible to that, what should I do then?

Perhaps long Strangles\Straddles? But they cause a relatively significant loss if the price stays very near to its current location at expiration, while double-one-touch would result in much less I guess.
 
Quote from Shabi:

So it seems bottom line is nothing have the exact one-touch effect. But how about double-one-touch with the barriers posited far out of the market? there will be a little loss if the price stays anywhere between the two barriers and large profit if it touches one of them. So suppose I still want to get an effect as close as possible to that, what should I do then?

Perhaps long Strangles\Straddles? But they cause a relatively significant loss if the price stays very near to its current location at expiration, while double-one-touch would result in much less I guess.

It's a path-dependent position; meaning in this case that you cannot hold the position to expiration if the barrier is touched. Whether it's a single or double doesn't change that fact.
 
Quote from IV_Trader:

The waiver of the payout beyond the strike in exotic vis a vis vanilla is a reason for non-replication, correct atty ?

Right, that's one of many. It's why I mentioned the lookback.
 
I am intuitively thinking these are being used more and more

in the trading world and wonder if they serve any useful purpose?
 
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