industry is a scam. A b Weinglass, Simona (June 18, 2017). If a customer believes the price of an underlying asset will be above a certain price at a set time, the trader buys the binary option, but if he or she believes it will be below that price, they sell the option. Retrieved September 20, 2011. The skew matters because it affects the binary considerably more than the regular options. Retrieved 5 September 2016.

Pin risk edit Main article: Pin risk A special situation called pin risk can arise when the underlying closes at or very close to the option's strike value on the last day the option is traded prior to expiration. Options are part of a larger class of financial instruments known as derivative products, or simply, derivatives. Call) is worth exactly one unit. Weinglass, Simona (August 13, 2016). And, d_1frac ln frac SK(r-qsigma 2/2)Tsigma sqrt T,d_2d_1-sigma sqrt., Cash-or-nothing call edit This pays out one unit of cash if the spot is above the strike at maturity. Option Copyright 2017 DLA Tech LTD Sokolovská 131/86, 186 00 Praha 8-Karln, Czechia. You make a profit of 100 -.50.50 (less fees). Retrieved February 15, 2017.

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