What Is Digital Option?

Digital option is very popular among investors in fact this is the most popular binary option based on cash or nothing option trading. The digital options pay-out is fixed after the underlying stock exceeds the predetermined threshold or strike price. Here is an example of digital option trading.

Imagine a scenario, after conducting some basic analysis, the trader predicts that the price of gold will increase in one hour and he/she will purchase a Call option. On the other hand, if the trader thinks that the price of gold will drop before the time of expiration, he/she will purchase a Put option. From the onset, the trader knows how much money they can win or lose? This makes it easy for traders to manage their risk and calculate their gains thoroughly before ever putting a penny on an option.

You can find many popular digital strategies that investors and traders can learn in order to increase their chances of being in-the-money.

Close Now enables traders to buy an option before the time of expiration and this could be very useful if you think that your option is not performing   as you expected and the asset you chose is not moving in the direction you predicted.

Extend is very useful feature that enables traders to extend the expiration date of option so that you can be sure that your option will be in the money. So, if you purchased a one hour Put option on silver, and five minutes before the time of expiration you notice that the price of silver has still not decreased like you thought, for a one-time fee you could Extend the time of expiration to give the option the opportunity to be in-the-money.