European Digital Range Outside Option
By selecting the European Digital Range-Outside option, the investor expects the chosen market to be out of the price range till expiration day. This type of transaction we use during periods of increased volatility when the set price levels may be broken. The investor choses two prices (two triggers), which form a price range – if the prices moves out that range (outside the triggers), the investor cashes the profit. If on expiration day, the price of the base instrument stays within that range, the investors incurrs the known loss. Because binary options have limited risk of loss, at the moment of making the transaction, an entrance fee is charged. The higher the probability of gain (a narrow price range meaning the triggers closer to each other) the higher the price of the option and vice versa.
