Yes I am. Maybe you missed what i posted. Touch is a target fill. When it hits (touches) this price (strike) then it is hit. When price hits a strike you know you can exit at say 47(bid)/53(offer) as the binary will ALWAYS be a mid of 50. Again show any evidence to the contrary. So if i buy at 20 and the underlying reaches my strike i can exit at 47. Or if I sell at say 80 i can buy back at 57 when the underlying reaches my strike. A price on a "touch" which is only availble as far as i know via an OTC would should use the same delta model. If not then the model is off (skewed against you) as shown in evidence above. Again show evidence screenshots pricing to the contrary versus just saying "nuh uh".
So your response is I'm right your wrong with no evidence screenshots pricing examples etc..? A call yes continues to earn but the sold call on a vanilla continues to lose and the profit is capped. Maybe your just smarter than me. Thats okay. but the post below does not help explain anything. I'm not sure what your point is actually. And would need an example to see what you are trying to say as I'm sure most would. I see no evidence here of anything or how it can be used practically or show that my statements are false. Give some actual examples with real screenshots of real prices showing some real evidence. Sincerely give me some actual evidence teach us please.
Jackie, if you think you can make money at Nadex, go ahead. But I am sure you won't. Exchange will make money on commissions, MMs on bid/ask spread, but unlike the case of poker game, there is there nothing for you.
As I responded earlier all exchanges have bid/ask spreads and fees and theirs are comparable. I've seen no evidence to the contrary. I've already been trading them 2 years now. But I understand its not for everyone. To each his own. http://www.elitetrader.com/vb/showthread.php?t=281824&page=3 http://www.elitetrader.com/vb/showthread.php?t=281824&page=4
Drownpruf, Wow, sorry I offended you. You of course don't have to do anything. I was just responding to your statements and providing evidence showing what I was saying and ideally get some evidence of what you where saying to be accurate and that I was false so I and others could learn. Thats the purpose of the forum to share ideas, challenge ideas not just accept them, and ideally improve as a trader.
absurd. Touch probability is ~2x expiration probability (2x dirty delta), but you cannot replicate a touch option with a digital. Yes, an atm digital has a fairval of 50/100 regardless of the vol-line, but as OTM they are priced to vola. The convergence to a pick-em market "ATM" on the digital has nothing to do with the payout on a touch option. A target on the trade = the barrier does not make it a touch option. It's a convenient method to solve for an expectancy absent volatility in pricing of a digital. Of course you still need sufficient realized vol to hit the number. Say the smile is very aggressive and you're in an otm put digital. The 30-delta (flat strip model) is priced at 40/100 (50/100 atm target).... and the pricing reflects the steepness of the smile. You would likely look elsewhere for bear-deltas. You don't understand path-dependency. And a 30/100 touch is 100/100 at the barrier, so what? It's the nature of a delimited option. Whoa, what a discovery. And we use vanna-volga (use gamma, not delta) for pricing touch mkts.
Price a touch option at 40D with a week to expiration in real-time and compare the gamma (and speed) and PNL to that of a digital. Don't apologize, just go away.
Comparable? Sure... How about an SPY ATM-ish digital for this Friday?If I replicate these things using SPY weekly 175/175.5 call spread, I get 0.42 @ 0.46 on screens (4% wide) if i translate from spot prices of 0.21 @ 0.23. Where does Nadex show the market? If I want to trade these in $100,000 notional, that would be 2,000 contracts (now everyone can plug in their comissions/fees). What fees would Nadex charge?
Data pulled at 1:11 ET. Fees are $0.90 per, on the open and close, with a ticket max of $9.00. http://www.nadex.com/create-account/transaction-costs.html