Derivatives

Self-Referencing CDS

July 12, 2021
Derivatives

Binary Cap

July 12, 2021

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An exotic option whose payout is equal to the value of the underlying asset if the price of the asset exceeds or falls below the exercise price at expiration. In either case, the option holder receives no payment. Depending on the asset price behavior with respect to the exercise price, the asset-or-nothing option comes in two categories: asset-or-nothing call and asset-or-nothing put.

This option is a type of a binary or digital option.

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