Binary Replication

⚠️ Warning: Running this bot is not for the faint hearted. It involves significant risk and complexity; and is not recommended for beginners. If you are new to trading bots, we strongly recommend skipping this campaign and starting with the Simple Quoter bot.

If you have an advanced understanding of delta-hedging, an ability to write asynchronous code and read Dynamic Hedging by Nassim Taleb, and any of Euan Sinclair's book, then this campaign might be for you.

What is Binary Replication?

In keeping with our tradition of simplicity, we've built a simple binary replication (i.e. Start-Gain Stop-Loss or SGSL) bot using only 95 lines of code.

The idea comes as a follow up to our SGSL series (Part 1) where we discussed the challenges of Black-Scholes delta hedging for options replication and introduced an alternative 'binary' approach: Buying the perpetual when the price crosses the strike and selling (stopping out) if it falls back to the strike.

In other words, it aims to replicate the payoff profile of a 0 (nothing) or 1 (all) binary call option by dynamically managing conditional stop orders based on the current position and predefined price levels. This conceptually simpler method reduces the complexities associated with continuous delta adjustments.

Code Logic

The main logic is in the BinaryReplicator class and is as easy as using if/elif statements together with our Thalex library.

These conditional statements represent a binary flip:

1. If the current position is equal to zero, create a conditional buy order with the TARGET_SIZE at the predefined buy price level STOP_BUY. This acts as an entry trigger when the price rises to this level
2. Once the buy order is filled, the position will be greater than zero. In this case, reverse the operation and create a conditional sell order with size equal to the current position at the predefined sell price level STOP_SELL. This acts as a stop loss to exit the position if price falls to this level
3. Rinse and repeat

Terms & Conditions

Campaign Terms

1. The reward is granted in the form of non-withdrawable ABCs ("Asset Balance Credits"), deposited on the Participant's Account, provided all relevant conditions are met.
2. This campaign is open to all customers that have verified their account on thalex.com.
3. During the campaign period, if you trade at least $100,000 in notional volume with the binary replication bot on thalex.com, you earn $500 in ABCs. If, in addition, you share an analysis of your bot's profit and loss, you will be able to earn up to an additional $1000 in ABCs. The amount granted is at the discretion of Thalex.
4. Thalex reserves the right to remove the ABC deposit reward if the deposit is withdrawn before the campaign ends.
5. ABCs increase your margin balance, for the purposes of trading only, and cannot be withdrawn or used for any other purpose. Trading profits generated from the use of ABCs are withdrawable.
6. Thalex reserves the right not to grant rewards in case of any non-compliance with the Terms & Conditions, illicit behavior, or unfair advantage at its own discretion.
7. Thalex will not be responsible for any margin calls, close out positions or any other risk event that must be managed by each Participant individually, in accordance with their own risk profile.

ABCs Fair Use

• Asset Balance Credits, or "ABCs", are governed under the Terms of Use.
• ABCs increase Available Margin on an Account. Thalex reserves the right to reverse any granting of ABC in the event of breach of the Terms of Use, including breaches of the Rulebook.
• ABCs don't expire. However, Thalex reserves the right to remove any ABC balance from an Account following six months of inactivity.
• Thalex is the sole interpreter of the Terms and Conditions of each Campaign, of the Terms of Use and of the Rulebook.

For additional information or support, please contact our support team.