Confusion of Binary option and Digital option!!
Binary options trading are just the same as Digital option trading, it is referred to as digital because you have to close the deal or the trading through electronic processes like electronic transfers, electronic approvals and electronic payments, The terminology “binary option” emphasizes simple thing like there are only two choices when trading binary options – a CALL option (the price will increase) or a PUT option, the price will decrease. Digital options give you the power to trade in a variety of financial instruments, such as shares, foreign currency pairs and indices. The Binary Option trading platform is a great way to put your financial knowledge to use and put your strategies into action via digital option trades.
Hope, you have no confusion now.
Hi, crimson! You are right that the word Binary denote just the simple fact that there are only two possible incomes from a binary option trade – In the money or Out of the Money. In their origin they are digital options.
Binary Options are a type of options where the payoff is fixed amount of money. Digital Options is a synonym of all-or-nothing option. Binary options are usually European type of options – that mean they are able to be exercised only at the expiration date of the option, i.e. at a single pre-defined point in time. Due to the difficulty in hedging binary options that are ATM near expiry, they are much less traded than vanilla options, but in my opinion their future is bright and their usage will grow exponentially in the future with development of more sophisticated hedging and offsetting techniques. The prove is that Amex and CBOE introduce the binary options in 2008. Since then we have a great progress toward better pricing and more instruments available to be traded with binary options.