A Binary Touch Option differs from a plain Vanilla Option
in that the potential gains and losses of a Binary Touch Option position is known upfront, thus greatly simplifying the transaction.
The combination of lower prices, extended payment plans and entry into developing areas has forced investors to take opportunistic bets in the off-plan market compared to the plain vanilla options
in the ready space," says Hussain Alladin, head of IR and research at Global Capital Partners.
It includes Plain Vanilla Options
, Asian Options, all kinds of Barrier Options, Binary / Digital Options and Look-back Options.
As implied volatilities are down significantly (45% for the RTS Index) and have almost reached their pre-crisis levels, plain vanilla options
now look less expensive than they did two-three months ago.
pricing of plain vanilla options
, digital options, barrier options and the less well known exotic options