Digital options, or Higher-Lower options, are the most widely traded options available on our platform. Traders are to determine whether the price of an asset will rise or fall before the predetermined expiry time.
When investing in a call (or higher) option, the trader predicts that the price of the chosen asset will be higher at expiry time than it was at the time the trade was made.
An example: It is 12:00 and the trader puts a call option on the market-price of silver and the expiry time of this option is 14:00: the trader believes that the price of silver will go up over these two hours and will have return on his money if this is the case. If the price is lower at 14:00 than it was at 12:00 his investment will have failed, and he will lose the investment.
When a trader invests in a put (or lower) option, he predicts that the price of an asset will go down over the period between the time of his investment and the expiry time of the option.
If we take the first example: It is 12:00 and the trader puts a put option on the market-price of silver with an expiry time of 14:00. He is in the money when the price of silver is lower at 14:00 then it was at 12:00, and loses his investment when the price of silver is at a higher point.