Asset swapped convertible option trade definition28 comments
How to select an ideal binary options platforms
FX Options are split into vanilla and exotic. An FX vanilla option is a financial instrument that gives the holder the right, but not the obligation, to buy or sell an underlying currency at a predetermined price within a given timeframe.
A vanilla option is a normal option that has no special or unusual features. An exotic option is one which has features making it more complex than the more commonly traded vanilla options. The MT is used for options that have exotic features.
The following exotic options are supported:. The option may have two barriers, which may both be knock-in or knock-out, or where one is knock-in and the other knock-out. It is possible to specify that the barriers are monitored only during one or more windows.
It is also possible to specify that the barrier is monitored only at discrete times and not continuously. Binary or trigger options are a class of options in which a fixed pay-out is made if a specified trigger condition is met during the life of the option. It is possible to specify that the trigger is monitored only at discrete times and not continuously. It is possible to specify an optional early termination clause for all classes of options, which gives the buyer the right to terminate the option early at specified times during its lifespan.
Average rate forwards and options, in which either the rate or the strike or both are calculated based on an average rate calculated over an agreed period. It is beyond the scope of this document to describe all these instruments in detail, but much useful information is readily available on the internet.
The MT is used for deliverable and non-deliverable vanilla options. The following exotic options are supported: The option may be deliverable or non-deliverable.
Binary options may have barriers. These may have barriers. Average rate options are always non-deliverable, but average strike options may be either deliverable or non-deliverable. Exotic Option Lifecycle Support As well as supporting the initial confirmation of exotic option trades, the MT may be used to confirm the following lifecycle events: Physically Fixed Deliverable Options These are deliverable options that are "auto-exercised" based on an agreed rate source.
Discrete Barrier Options The MT supports barrier options, in which the barrier or barriers are monitored within a window. It also supports multiple monitoring windows. These are known as binary, digital, and no-touch options. It also supports multiple sets of triggers, based on different currency pairs.