It stands for single payment options trading. A type of currency options trading in which an investor can choose whether to proceed with the purchase or sale of a certain amount of currency at a specific date or to back out. This option allows the holder to determine the conditions that guarantee for him a desired payout. Additionally, the investor can determine the size of that payout in case those conditions are satisfied.
In this type of currency trading, the contract is settled in cash immediately as it automatically converts the option to cash when the trade is successful. This arrangement is similar in structure to binary options since it allows only for two possibilities of payout: First, the agreed-upon payout, if the conditions of both parties are met. Second, nothing at all, otherwise (and the investor loses the full premium).
Comments