# Cash or nothing option payoff

The options described here are path independent, which means that the payout profile depends only on the value of the underlying asset on the expiration date of the option. In a cash-or-nothing option, a predetermined amount is paid if the asset is, at option expiry, above call or below put some strike level, independent of the path taken. FINCAD offers the most transparent solutions in the industry, providing extensive documentation with every product. Portfolio valuation and risk analytics for multi-asset derivatives and fixed income.

Technical Details The simplest Binary also known as Digital options are cash-or-nothing and asset-or-nothing options. FINCAD offers the most transparent solutions in the industry, providing extensive documentation with every product. The simplest Binary also known as Digital options are cash-or-nothing and asset-or-nothing options. Cash or nothing option payoff A Binary Option is an option with a fixed, pre-determined payoff if the underlying instrument or index is at or above the strike at expiration. The payout at expiry, if the option is in-the-money, is equal to the asset value, less the gap value.

Introduction A Binary Option is an option with a fixed, pre-determined payoff if the underlying instrument or index is at or above the strike at expiration. The simplest Binary also known as Digital options are cash-or-nothing and asset-or-nothing options. Introduction A Binary Option is an option with a fixed, pre-determined payoff if the underlying cash or nothing option payoff or index is at or above the strike at expiration.

For a call, the payout is received if the underlying asset price is greater than the strike price, and for a put, the payout is received if the strike is greater than the underlying asset price. FINCAD offers the most transparent solutions in the industry, providing extensive documentation with every product. A simple generalization of the asset-or-nothing option is a digital-gap-option. It is clear that a digital gap option is cash or nothing option payoff the difference between an asset-or-nothing and a cash-or-nothing digital option with the cash amount set to the gap value.

A Binary Option is an option with a fixed, pre-determined payoff if the underlying instrument or index is at or above the strike at expiration. The next generation of powerful valuation and risk solutions is here. In a cash-or-nothing option, a predetermined amount cash or nothing option payoff paid if the asset is, at cash or nothing option payoff expiry, above call or below put some strike level, independent of the path taken. An asset-or-nothing option is similar to a cash-or-nothing option except that the holder of the option is entitled to either the full asset value - at option expiry - or nothing.

The payout at expiry, if the option is in-the-money, is equal to the asset value, less the gap value. The simplest Binary also known as Digital options are cash-or-nothing and asset-or-nothing options. A Binary Option is an option with cash or nothing option payoff fixed, pre-determined payoff if the underlying instrument or index is at or above the strike at expiration. The next generation of powerful valuation and risk solutions is here.

The payout at expiry, if the option is in-the-money, is equal to the asset value, less the gap value. A digital gap option has a payout profile equal to the asset value, less the gap value, depending on whether the asset finishes above or below the strike price. FINCAD offers the most transparent solutions in the industry, providing extensive documentation with every product. It cash or nothing option payoff clear that a digital gap option is simply the difference between an asset-or-nothing and a cash-or-nothing digital option with the cash amount set to the gap value.

A Binary Option is an option with a fixed, pre-determined payoff if the underlying instrument or index is at or above the strike at expiration. Calculate the fair value and delta for a path independent digital or binary gap option. The payout at expiry, if the option is in-the-money, cash or nothing option payoff equal to the asset value, less the gap value.