Forums on binary option vs spread betting
Can someone please help - in Vol 1 Exam 2 Q So it seems like in both scenario, option holder will be beneficial if ref rate increases beyond the strike price, correct? A binary credit put option is based on ratings downgrade especially from investment grade to below-investment grade. I am concerned about ratings downgrade and would like to put the bond back to issuer in case such downgrade occurs. Then put option will expire out of money and payoff will be 0.
The first one described by you shall be Binary Credit Put option. Binary credit options based on default of underlying asset equivalent to credit put option if based on credit rating of underlying asset. Binary credit options based on default of underlying asset referred to as credit put option if based on credit rating of underlying asset. From my memory, Schwezer notes only mention the more common 2 options, binary credit puts and credit spread call.
However, there are actually 4 in the CFA text. Nevertheless, the less common 2 options are discussed very briefly in CFA text and easy forums on binary option vs spread betting be missed. I know it may look counter-intuitive to have binary credit calls and credit spread put.
There is a couple example or EOC Qs in the text regarding these 4 types. I will take a look tonite and post where it is. Besides, I also had the some problems with the explanation on Vol 1 Exam 2 Q Well, I will take forums on binary option vs spread betting look tonite. Not completely sure though. For Credit Spread Call- you are betting through the use of an option that Spreads are going to increase.
If you are out of the money then you lose your premium. Credit Spread Put- you are betting through the use of an option that Spreads are going to narrow. Because spread is affected not only by credit rating, but also other factors. I think price up is good or credit spreads go down are good and no need to protect, is it that these 2 options enable investors to take advantage of price up or credit spreads go down?
I think price up or credit spreads go down are good and no need to protect, is it that these 2 options enable forums on binary option vs spread betting to take advantage of price up or credit spreads go down?
If so, this is intuitive for binary credit call to buy but it seems do not make sense for credit spread put to sell. Please disregard my previous post. For credit spread calls and puts, it can be either used as protection or making bets based on the mgr.
I believe Schweser Vol 1 Exam 2 Q I will make an errata reporting tonite. So if you are a buyer of a credit forward, you gain if spreads widen? Same thing with credit option call spread contracts. You gain when spreads widen? You and your counterparty in a credit spread forward bet on different direction of credit spread in order to either hedge an existing bond position or just speculating.
In order to protect yourself, you purchase a 3-mo. The payment may not exactly match your bond A lose value, depending on how you set up the risk factor in the contract initially. Forums on binary option vs spread betting gain from the forward somewhat offsets your loss from bond A position. Note that you will end up pay your counterparty instead if the credit spread turns narrower at contract maturity.
At the same time, your loss offsets by your gain from bond A position to certain extent. There is a variety of derivatives to hedge different risks. They use specific derivatives to modify their exposures. James…that made a lot of sense…I seem to be using only forums on binary option vs spread betting my brain these days it seems. Actually all your questions were valid ones. We are all here because we search for answers and help others to search theirs.
It really helps to answer exam Qs especially some of the AM essays. Credit options aka binary options Related to price of the underlying. Can be a call bet price is going up or put bet price is going down. Price action itself does not trigger a payoff, has to violate one of the terms in the contract that would define a credit event.
Related to credit spread of the option. Can be a call bet forums on binary option vs spread betting is widening or a put be spread is tightening. Credit spread movement is itself considered a credit event, so no need to evaluate as seperate factor. Related to credit spread of option. Valued like a usual forward, but as opposed to just a spread or reference rate, specifically refers to the credit spread.
Sell CDS contract, receive upfront and periodic premia; forced to deliver predetermined value in case of credit event again, what defines a credit event? Buy credit spread calls the underlying is the credit spread, which will increase if credit risk goes up Buy credit spread forwards. Skip to main content. Be prepared with Kaplan Schweser. With exam day right around the corner, Schweser's Final Review products are designed to help you finish out your study plan and walk into the testing center feeling prepared and confident.
I would also like to know. Think i can explain it more precisely …. AMC May 11th, Correct me if I am wrong! As far as i understand this topic, under credit options we have: Binary credit options based on default of underlying asset equivalent forums on binary option vs spread betting credit put option if based forums on binary option vs spread betting credit rating of underlying asset 2.
Binary credit options based on default of underlying asset referred to as credit put option if based on credit rating of underlying asset 2. James Houston May 11th, I went into the same question as grgkir a couple of months ago. GMofDen May 11th, MrGrey May 11th, 1: GMofDen May 11th, 1: The info is in the CFA book 4 right around page AMC May 11th, 8: James Houston May 12th, AMC May 12th, 7: James HoustonAgree with your explanation.
James Houston May 13th, 1: This is how I think about these: Credit spread movement is itself considered a credit event, so no need to evaluate as seperate factor Credit forwards: Valued like a usual forward, but as opposed to just a spread or reference rate, specifically refers to the credit spread Credit swaps: CDS is most common; can: I hope this was helpful, it was as much helping clarify as helping me remember all of this.
James - only just followed this thread up. To protect an asset against credit risk, there are basically these choices:
APEX has just been made aware of the recent News on Nadex regarding that they will no longer allow for Canadian residents to open or trade an account on the Exchange. We have the same information that was relayed via email to all existing Canadian members of Nadex and have no other details regarding. Please feel free to comment on your experience with these 5 brokers who "seem" to have a good reputation. Futures and Forex forums on binary option vs spread betting some spot gold etc.
I will add more brokers or notes as they come in. Note if you post a bucketshop i will ban you so don't do it. Also you can trade forums on binary option vs spread betting and Forex. A chart forums on binary option vs spread betting a chart dont feel like you can't trade just because you can't trade on Nadex. It will be back. From what I can tell, they are working on establishing an official presence in Canada. This will most likely move towards the OSC banning the bucketshop binaries brokers which are currently allowed in Canada and which the OSC frequently puts out warnings regarding them in order to protect Canadians.
To do this the right way, they Nadex probably has to pull out of Canada, file everything and then return. I fully expect that sooner rather than later, Nadex will be returning to Canada in full force. This is just opinion- solely my speculation. Is your trading career over? Feel free to PM me other brokers and I will be happy to review them and let us know if you have any questions.
I'm a Canadian trader so I guess my trading days are over We have valued having you as a member of the Nadex exchange. That's why it is with regret that we have to inform you that we will no longer have Canadian residents as members. We have been in communication with the Ontario Securities Commission regarding Nadex members residing in Canada and we are exploring the opportunity to establish a formal presence throughout Canada.
While we explore this opportunity, we have decided to stop accepting new applications from Canadian residents and to close our existing Canadian members' accounts. This policy change happened recently and takes effect immediately.
If you have any open positions, you can exit them or let them expire. After the close of the Exchange on Friday you will not be able to deposit additional funds to your account or enter any new trades. We will wire your funds to your primary bank account on file early next week. If you deposited via debit card and haven't finished verifying your bank account, we'll be reaching out to you. We will of course waive the wire transfer fee. If our policy changes in the future we will be sure to let you know, but at this time, we can't say if or when that will happen.
In the meantime, we wish forums on binary option vs spread betting all the best and thank you for being a Nadex member. The Nadex Team Nadex Phone: Nadex is subject to U. Futures, options, and swaps trading involves risk and may not be appropriate for all investors. This is an advertisement or promotional email from Nadex. The contents hereof are not an offer, or a solicitation of an offer, forums on binary option vs spread betting buy or sell any particular financial instrument listed on Nadex.
Thank you for applying to be a member of the Nadex exchange. Normally, we'd be writing about the completion of your application, but unfortunately we are no longer accepting applications from Canadian residents. In the meantime, we wish you all the best and thank you for applying. This is odd - no explanation or forums on binary option vs spread betting about the reasons why Nadex has decided to do this.
It's the first I've heard of it maybe I'm out of the loop? Anyone have an idea of what's up with this and if we have any alternatives this side of the border? It is the nanny state forums on binary option vs spread betting its finest I don't forums on binary option vs spread betting the exact details but it is in essence the Ontario Securities Commission hounding them and not wanting Canadians involved in any investing ventures outside of Canada where they OSC doesn't have any oversight.
Its for 'our protection. Hi - I just submitted an application to http: Here is an 8th one: This is key when looking make sure it is properly regulated. Dont just trust their site hop on the regulators site and look up complaints penalties fines. The regulator needs to be in the USA or in Canada not some isle of man cyprus crap. These guys may be awesome. If anyone knows let us know. Dig in and share. I will have to verify but I seem to recall this when I was shopping for a forex broker. I look at the new brokers and think - "I'm lost.
I don't know, maybe I'm just dimwitted, but I would feel much more comfortable if we could get a training video featuring one or two of the brokerages suggested, explaining the ins and outs and differences between them and Nadex. From another friend I know they are ok but personally I didn't take yet my first profit with them.
The leverage is very good I have also a live and demo account with Oanda Canada which are regulated in our country but there the leverage is very small I will trade with them later when my account will grow. Again I do only Forex and I wait for Nadex to come back to use them only for spreads.
They are buy at one price sell at another. You dont have to worry about expiration or premiums or the such. So what do you need training on specifically. No one needs I have heard of IC Markets have not heard anything bad about them. These are not ranked from favorite to least favorite Its just a list Please feel free to comment on your experience with these 5 brokers who "seem" to have a good reputation. But they do not have a lot of patience for basic questions demos come with funded accounts if i remember correctly been a while since I had an account with them.
They offer about every product under the sun to trade and are highly regulated http: Having problems viewing this email? Nadex is no longer accepting applicants from Canada Thank you for applying to be a member of the Nadex exchange. Sincerely, The Nadex Team This is odd - no explanation or anything about the reasons why Nadex has decided to do this. Thanks, Sad Staring Dog. Hi, It is the nanny state forums on binary option vs spread betting its finest Since we as Canadians cannot trade with Nadex, what othere options do we have.
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