Exotic Options - Rainbow Options
From MarketPunter
A rainbow option is a derivative whose price is attached to two or more underlying assets or events.
Rainbow options are often used for hedging risk from several events.
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Binary Options Trading Platform by TradeSmarter. Stock market data provided by Reuters.
This page was last modified on 8 October 2009, at 14:38. -
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Binary options – also known as digital options or fixed return options are sort of a
hybrid between traditional options and fixed-return financial instruments.
Digital options are simple, and they are ideal for the trader who wants the potential
for significant, short-term gains with a strictly limited risk. This means the
investor who trade binary options can know immediately and exactly how much a trade
will yield or lose. A binary option allows you to form an opinion on whether a
specific outcome will or will not occur. They can only have one of two possible
outcomes. Unlike a spread bet a digital option does not require margin, no stops
and you know the exact maximum risk and maximum profit. Binary Options trading
allow you to take a simple “Yes or No” approach ( or Above/Below) on whether an
outcome will occur. For example, will the GOOGLE close up on the day at the expiry
time? If “Yes,” the Binary option settles "in the money" If “No,” the Binary option
settles "out of the money".
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Disclaimer
TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, MARKET PUNTER EXPRESSLY DISCLAIMS ALL WARRANTIES OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, RELATING TO THE SITE, PLATFORM, CONTENT, AND SERVICES, INCLUDING WITHOUT LIMITATION THE WARRANTIES OF TITLE, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF PROPRIETARY RIGHTS, COURSE OF DEALING OR COURSE OF PERFORMANCE. MARKET PUNTER DISCLAIMS ANY WARRANTIES, EXPRESS OR IMPLIED: (I) REGARDING THE SECURITY, ACCURACY, RELIABILITY, TIMELINESS AND PERFORMANCE OF THE SITE, CONTENT, PLATFORM, AND SERVICES; OR (II) THAT THE SITE, PLATFORM AND SERVICES WILL BE UNINTERRUPTED, ERROR-FREE OR THAT ANY ERRORS WILL BE CORRECTED; OR (III) REGARDING THE PERFORMANCE OF OR ACCURACY, QUALITY, CURRENCY, COMPLETENESS OR USEFULNESS OF ANY INFORMATION PROVIDED BY THE SITE, PLATFORM AND SERVICES.