“Are You All Sitty Comftybold Two-Square On Your Botty? Then I’ll Begin.”
Binary Options Gobbledygook
It is sometimes claimed, perhaps not unreasonably, that the English invented among other things, English; some might consider, therefore, that those of the ilk of the late Stanley Unwin, an Englishman, a comedian, but ultimately a matricide of his mother tongue have the right to, if not destroy English, then at least to bastardize it.
In post-colonial America, when that country was attempting to stand on its own feet, Americans decided to not only break away from their benefactor but also to establish an independent language since clearly the language of Chaucer and Shakespeare was not good enough for them. Subsequently in 1828 Noah Webster wrote ‘An American Dictionary of the English Language’, a vainglorious attempt to establish cultural as well as political independence. This overt plagiarism where the ‘u’ was knocked out of the word ‘flavour’ and the letters ‘e’ and ‘r’ were switched in the word ‘centre’ did not deceive anyone. Now, as a last gasp effort to justify the US’s theft of English intellectual property, it would appear that Bing has determined the language English is not English at all, but British.
This ignorance was supported by the American corporate giant Adobe which indulged in its own linguistic nonsense by, on inviting the purchaser of their software to ‘Choose Language’, proffered ‘English (US)’ but not ‘English (England)’, even less so, just plain ‘English’.
How about ‘A Nigerian Dictionary of the English Language’ along with the plethora of other countries that the English have so kindly ‘lent’ their form of communication to?
Binary Options & Unwinese
English is English, yet in much the same way that the US feels it needs to stake a claim in this language that the English have provided to the world for free (possibly the most generous open-sourcing of all time?) now we see the likes of the New York Stock Exchange and CMC Markets, plus various other corporates, introduce their own ‘Unwinese’ to the world of binary options in order to establish an identity for their bland offerings.
Since the early ‘70s conventional options have come up with their own handles for options strategies, such as ‘straddle’, ‘strangle’, ‘call ‘fly’, ‘put ‘fly’, ‘condors’ and ‘combos’. These strategy names are now generally used across the globe when trading conventional options. During that period, conventionals evolved in a localised environment, Chicago, within a mainstream exchange, the CBOE, and there was no mass marketing via a global form of communication, i.e. the internet.
Nowadays the very nature of the internet has rendered a local environment for the binary market to evolve in an impossibility. The market has developed as an internet-based OTC market where pretty much any Tom, Dick or Harry can grab a piece of the action by hiring for peanuts binary options platform technology. Since the market is still so immature participants attempt to stake a claim in its development with absurd names for what are quite possibly the most simple of instruments.
NYSE ByRDS & CMC Countdowns
The “Professor Unwin Prize’ for the introduction of the most ludicrous Gobbledygook has to go to the New York Stock Exchange with its insistence that a binary call option is a Finish High Binary Return Derivative Option while the put equivalent is, yep, a Finish Low Binary Return Derivative Option.
To supplement the Byrds the NYSE has renamed tunnel options ‘Finish High ByRD Credit Spread’ and the ‘Finish High ByRD Credit Spread’, the former when one is long the tunnel, the latter when it has been sold. To have a different name for a strategy dependent on whether it has been bought or sold is mind-boggling.
IG Group have determined that a range of strikes in a series is a ‘Ladder’ which is passable if the term ‘ladder’ was not already a conventional options strategy.
But the latest outfit to enter the binary options fray is CMC Markets who have determined that an at-the-money binary call or put option with a strike always set to the underlying asset price, i.e. the strike changes in accordance with the asset price, are ‘Countdowns’. One assumes this must be a reference to the time decay of the product which is generic to both conventional and binary options thereby at a (master)stroke CMC Markets have introduced a new terminology to a market that has been ‘doing OK, thank you’ for getting on for 40 years.
Binary Options Evolution
A uniform regulated market has worked in Japan with the Japanese doing huge numbers. Europe remains the biggest market for binaries owing to the marketing drive from Tel Aviv. Neither go the complicated route of exotic binary options with the dynamic at-the-money call and put, aka the ‘Over’ and ‘Under’ respectively, being the common terminology for that most heavily traded binary instrument. The dynamic nature of the ‘Over’ and ‘Under’ has not been preceded in the conventional options market by an equivalent so naming these instruments ‘Over’s and ‘Under’s does not trivialize the market. Calling them ‘Countdown’s and ByRDs does hamper the development of the market as the names are frivolous, pointless, confusing and are likely to demean the binary options as serious investments.