Pricing digital call option

Pricing a Digital Option

A digital option is an option whose payout is fixed after the underlying stock exceeds the predetermined threshold or strike price. It is also referred to as a "binary" or "all-or-nothing option.

If the underlying asset expires in the money, the option is automatically exercised. Therefore, they may carry a higher risk of fraudulent activity.

Investors who wish to invest in binary options should use platforms that are regulated by the Securities and Exchange Commission SECthe Commodity Futures Trading Commission CFTC or other regulators. The value of the payout is determined at the onset of the contract and doesn't depend on the magnitude by which the price of the underlying moves.

Since digital options are fairly simple to understand, this type of option may be more attractive than plain vanilla European or American options.

replication - How to replicate a digital call option - Quantitative Finance Stack Exchange

Contrary to a pricing digital call option call option, a digital put option is a bearish bet on an underlying security. Dictionary Term Of The Day.

Digital options: pricing by replication | Field Recordings

A pricing digital call option of what anyone trading binary options wikipedia costs an investment company to operate a mutual fund. Latest Videos PeerStreet Offers New Way to Bet on Housing New to Buying Bitcoin?

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What is a 'Digital Option' A digital option is an option whose payout is fixed after the underlying stock exceeds the predetermined threshold or strike price.

Digital Put Option Contrary to a digital call option, a digital put option is a bearish bet on an underlying security. Cash-Or-Nothing Call Binary Option Cash-or-Nothing Put Index Option Put On A Call Call Option Exchange-Traded Binary Options Call On A Put In The Money. Content Library Articles Terms Videos Guides Slideshows FAQs Calculators Chart Advisor Stock Analysis Stock Simulator FXtrader Exam Prep Quizzer Net Worth Calculator.

Understanding Option Pricing

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