EURUSD going off at 60 on the week. I can't hedge large enough to make a difference (would require 1MM units here), and I didn't take the bet on Cauchy/symmetric-distribution (the long synthetic straddle). It's purely an upside call until I can get-off 500K spot at 3785. I've got a MIT short at 3785 for 500.
Good luck on the trades. I think 3800 may act as a magnet next week. vol lifted but not much last I checked, although I don't have access to live quotes on it. lol If you recall I was just trying to get into doing this until you took the only op I had away! (oanda) I'm thinking my best bet is IB and try to structure something similar in listed vanillas on equities. I do have work cut out for me before I do, but I understand the basic idea.
The curvature isn't the same, but you can structure a narrow OTM vertical (synthetic digital) and cut it when you hit the long strike. You'll have to trade larger than you would normally do.
Thanks for the explanation, this looks more involved than thought, interesting indeed. So the hedge idea is to recover 1/2 the original investment and not so much as to turn it into a scratch trade. There are 3 scenarios that I can think of: EUR trades through 1.3750, DNT expires but gained on touch hedge - loses 1/2 of investment. EUR remains above touch hedge and below upper boundary of DNT until expiration, loses on touch hedge but gain on DNT - scratch trade. Best scenario would be when touch hedge is triggered but stayed within DNT bounds till expiration - gains on both trades... nice!
I did, but I was on vacation, so for sake of transparency you can assume I did not. I missed the 75 short and had to chase it down to 50-62.