Digital option

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.

See also

• Binary option
• Call option
• Exotic option
• Option
• Put option
• Underlying asset