Digital options. Intro
An opportunity to purchase a few options in the same expiration time, combined with a big amount of strikes opens for the trader a large number of opportunities. As one of the examples, with the help of digital options it is possible to open positions ahead of time in positive territory, although not very big. It gives an opportunity to enter the market with predeterminedly successful position, however, with less profit percentage because of underestimated risks comparatively with usual options.
The main difference of this kind of options, let’s say, from binary options is existence of strikes. Strike can be understood as the market entry point. For instance, in binary options strike is always price or graph's situation at the moment, while in digital options is you who can choose the most advantageous level for a position opening.
Any moment of time you have 22 different strikes to choose. Pay attention to the fact that a number of rendered on the platform strikes can change depending on graph's scale and market situation. Profitableness in digital options directly depends on risks, so maximum profit on this instrument increased up to 900%.
In digital options the trader traditionally has an opportunity to realize his position before expiration (but not later than within 20 seconds before a transaction's ending), and, depending on current price, either to fix profit, or return a part of invested finances.
To conclude a transaction, it is necessary to make the following steps:
- to choose a desirable asset;
- to choose a sum you want to invest in;
- to choose a strike price;
- to press a button «CALL», if you think that the price will grow or a button «PUT», if the price, in your opinion will fall.
Wait for the end of expiration period or sell your option ahead of schedule.
Accept an asset, for transaction's conclusion, it is also necessary to choose two another parameters: investment sum and иstrike sum. Moreover, there exists freedom for taking tactical decisions. In certaincir cumstances it is inappropriately to choose a strike situated too far from current price level because the price can simply does not exceed a desirable level. On the other hand, some traders in chase of profit take an additional risk and choose highest or lowest strikes.
Digital options' transactions have the same rules of risks' management.It is thought that it is too risky to invest more that 3% of own trading capital to one transaction. It is better to work for the long run. We recommend you to find time for studying and practical using of various trading strategies and methods in teaching account.
Digital option is the most typical binary option which in slang is also called “higher-lower”. Digital option is a prediction of an asset price, vector of its future direction relating to the market entry point by trader's position.