Basic Introduction of Digital Options

What are digital options?

Digital options are a kind of financial derivatives, a special type of option contract, and the payment method has only two outcomes: a fixed amount or no return. When buying digital options, investors need to predict whether the price of the underlying asset will rise or fall on the expiration date.

When is the expiration date of digital options?

The expiration date of digital options is usually specified in the contract, before which date a trading decision must be made, otherwise the option will be automatically void.

What is the yield of digital options?

The yield of digital options depends on the specific option contract purchased by investors. The yield is usually between 50%-90%, and different digital options brokers may offer different yields.

How do investors choose digital options trading strategies?

Investors should choose an appropriate digital option trading strategy based on their own trading experience and risk tolerance. For example, if investors believe that the market is more volatile, they can choose to buy options with a larger rise and fall, or buy options with an average value over a period of time.

How to control risks of Digital Options?

Digital option trading has the characteristics of high risk and high return. In order to control investment risks, investors should adopt risk management strategies, such as setting stop loss positions, reasonably controlling positions, choosing more conservative trading strategies, and so on. In addition, for investors who do not have enough experience, they should trade under the guidance of senior investment advisors.