In binary credit options, the payoff is contingent upon both a credit even occuring and option being in the money. The value chaing up or down alone will not trigger the payoff. Is this correct?
Does this apply to credit spread options as well? What about credit forwards and credit swaps? Please clarify.
See the names tells us that. ie - Binary (0 or 1) is where you either have a payoff or not.
But the rest they are dynamic and would have based on the difference between the spread at which you locked (Strike Spread) vs Spread at Expiration. Cheers!