IG Markets offers "to Close Up/Down" (binary digital) exotics at a horrible spread of +47 / -53, i.e., you win around 88.6 cents per $1 lost! I was wondering what the bid/ask offered by big banks is...Is it closer to 50:50? I think I can still convert +47 / -53 to 50:50 with some clever hedging with Vanillas, but you know, "Simple is smooth, smooth is profitable" (an effort by me to translate "Slow is smooth, smooth is fast" to the markets! )
If you have to ask here its a closed option to you. You will need a relationship and an isda. Or at least a private client account and the willingness to trade 2-5mm notional per trade on a buy and hold basis.
QUOTE]Quote from newwurldmn: If you have to ask here its a closed option to you. You will need a relationship and an isda. Or at least a private client account and the willingness to trade 2-5mm notional per trade on a buy and hold basis. [/QUOTE] Thanks for the information. So if I have such an agreement in place, what is the typical spread that is negotiable?
You know, you could have answered the question. Or just not answered it. But you chose to take the time and energy to write a reply that basically says, "Fuck you, we're so awesome up here on Elysium that you don't even deserve an answer. Here is why." This condescending attitude of yours exists only because you have never worked outside Wall Street; straight A academics, good GRE score, Ivy League university, Wall Street job, arrogance of the in-crowd : correct me if got even a single thing wrong about your career so far. That you haven't had enough hard situations to gain some humility just shows what a protected bubble your ego lives in. If you really think you are oh-so-awesome compared to me, why don't you leave your job like I did and run a successful real-life business? We'll talk then. Jerk.
If you took my initial comment as a "fuck you" it wasn't intended that way. But if you assume that someone should respond to your queries immediately and if they don't then they are being condescending then: "FUCK YOU!" You got me partially wrong. I've worked in and out of wall street. Recently left it to pursue another career path: running a small manufacturing (real-life) firm.
Yes, I misunderstood your initial reply as I thought from some past replies on this board that you currently work for a bank, know the spread, but would rather not "disclose" it. Apologies for the vitriol, my bad!
No worries. My original post was just indicating that unless you have access to those markets, it's kind of useless. Banks are good at knowing what your best alternatives to trading with them are and pricing accordingly. I havent traded products like these in a few years, but when I did, spreads and liquidity were generally unattractive to their listed "close enoughs" and I had the benefit of trading off of interbank ISDA's (best collateral and credit terms).
It's not a common institutional product anyways, AFAIK, so I don't think a super tight spread is to be expected.
Binaries are discrete vanilla verticals, so trade listed products. Trade OTC what can't be replicated easily, like DNTs. A 47x53 market is actually acceptable. Consider the market in a similar call or put spread. You're going to pay three or four cents on an SPY vertical. Cantor recently received approval and rolled-out their binaries on EURUSD, GBPUSD and USDJPY. cantorexchange.com