I need to disagree, but then I have been schooled and educated on the job mostly by French traders. Hardly anyone ever traded options directionally. And I have worked with guys that pulled in many tens of millions year in year out, buy side and bank prop.
Yes, yes. How proud of yourself you are. I trade vanilla options directionally. It is your choice not to. The amount of traders who place algorithmic trades has gone from 10% to 60%. This excludes the HFT boys who do the churn and burn. These are algorithmic, directional trades. p.s. I trade my vanilla like I would barrier. I have a window around the strike, but instead of getting knocked out, I increase the position to decrease the avg. price.
Agreed. If I am bullish, why not agree upon a floor knock-out to save on the premium. I actually didn't think that anybody outside of a huge firm did the delta-neutral thing. Thanks for the info earlier.
I recall seeing some simpler exotics on a couple of platforms, but those are the exception, rather than the rule. In general, these things have their uses and the mkt has developed a lot. In the past, IMHO, as a client looking for the right risk profile (as sle has described it), the exo bandits would have made sure that I pay way too much for it. It would have then been a total waste of money.
conditional bracket order with limit price? *) if you know how to price your options, have a decent volatility modelling, vanilla options is good enough to do the job
still the case today, the few boxes or barriers I have seen at Saxo or elsewhere were priced so wide it was impossible to even consider for anything. OTC still rules and will continue to do so.
I was actually referring to the OTC mkt in my post. In the past, it used to be a vehicle for the smarter dealers to extract their pound of flesh from their more clueless buyside clients. Things have gotten better, though.
sorry, I misunderstood. Yes, I see tons of firms that nowadays auto quote straight into BBG IB or Symphony. On the other side the quotes are "scraped" off the chat, why IDBs not use APIs in the first place is a mystery to me.
Saxo is terrible. Why on Earth would anyone do CFDs? Or at least I don't like them. p.s. directional vanilla option