Isn't this limited to binary options because binary options have a set price and payout? Regular puts and calls have a potentially unlimited payout which means

Isn't this limited to binary options because binary options have a set price and payout? Regular puts and calls have a potentially unlimited payout which means the seller would have to put up some serious collateral and/or hedge their exposure. If nothing else, I'd figure that would add some complexity and/or counterparty risk. I'm not well versed in these matters, so perhaps you could enlighten me.