Demystifying digital options

Demystifying digital options

digital-horizon

The digital is the closest traded option that resembles an ordinary bet. "Do you want to bet, for a keg of beer, that it is going to rain tomorrow?" This bet pays out nothing or a keg of beer, depending on the rain event taking place or not.

Digital options are embedded in a large portion of structured products issued by banks, including autocallable and yield optimisation notes, and reverse convertibles. The digital option is characterised by a jump in payoff, or a discontinuous payoff based on

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

If you already have an account, please sign in here.

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: