Digital option: Difference between revisions
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imported>Doug Williamson (Create the page. Source: Handbook of International Financial Terms, Moles & Terry, 1999.) |
imported>Doug Williamson m (Add category.) |
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* [[Put option]] | * [[Put option]] | ||
* [[Underlying asset]] | * [[Underlying asset]] | ||
[[Category:Financial_products_and_markets]] | |||
Latest revision as of 14:18, 8 October 2020
Digital options pay out either a fixed amount, or nothing, depending on the market prices of the underlying asset.
There are two main types:
- 'All or nothing' options, referenced to the underlying asset price at expiry only (also known as 'binary' options);
- 'One touch' options, which will pay out if the underlying asset price reaches a pre-determined point at any time during the life of the option.
