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Why trade exotics on the buy-side?
What is the reason hedge funds or proprietary trading firms trade exotic options? Given that they are complex OTC products, don't the banks on the other side of the trade want to make significant profits as well? So why share the profits?If profit is not the only reason, does one use exotics for hedging? Can't that be reached with combinations of vanilla options traded on the market?Thanks
Why trade exotics on the buy-side?
sorry, this was meant in the trading forum