# Questions tagged [binary-options]

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### How to monetize ability to predict small stock movements smaller than spread?

For a relatively small subset of stock symbols I have been able to build a model that is able to 20-100 times per day consistently predict whether a stock is going up within the next 2 minutes, being ...
206 views

### Deriving the black-scholes formula for the European asset-or-nothing call option

I would like to find out what boundary/final conditions i should be using to find the formula for a European asset-or-nothing call option, as i feel that is where I'm making my mistake. I've read ...
383 views

### Bachelier Pricing Formula for Interest Rate Binary Options

Similarly to the Black and Scholes formula, I am looking to replicate Bachelier's caplet formula with two digital options: (1) asset-or-nothing (forward rate in this case) and (2) cash-or-nothing. For ...
287 views

### Binary Options: convert from “Cash or Nothing” to “Asset or Nothing”

I have a formula that uses Black-Scholes to compute the implied pricing of a "Cash or Nothing" binary option on the price of a currency. The option is priced/traded in the same currency as S, K and ...
811 views

### Greeks(theta) of a Down-and-Out barrier option

I am trying to figure out the theta for a down-and-out barrier put option. After some research of my own, I found out that a down-and-out put can be expressed as  P_V(S_0, S_0)-P_V(S_0, H)-(S_0 - H)...
35 views

### What is the effect of put call open Interest on price action

how option put call open Interest affects price actions as put sellers feel price when price goes down or call sellers feel pain when price goes up and how this affects price action. ie when price ...
49 views

### Calibration using only strike price

I have a binary option and want to calibrate it's BS pricing model. I only have a series of Strike Price vs the Option price, no knowledge on time to maturity, volatility, risk free rate or the ...
309 views

### Risk management for Digital Option at large Bank

Say, an investment bank sell Digital Call Option to its client at strike 100. But trader at the bank want to book the deal with a call spread at 99/100 (price&hedge Digital Option like price&...
268 views

### Pricing Exotic options

I am stuck at a assignment problem where I have to compute the price of an exotic option. I am given the values the prices of option $C(X;k) = E[max(0,X_T - k)]$ for different strike prices $k$ and ...
350 views

### Pricing binary options with kernel density estimation

Suppose I have a large enough set of prices of an asset, from which I can extract the following function: $f:T\to\mathcal{D}$, where $T$ is a fixed finite set of time intervals (say, 1 minute, 2 ...
121 views

### Relation between one touch and binary option

Is there a relation between the price of a one touch option and the price of a binary option? By one touch option, I mean an option that pays off a fixed amount if the price of the underlying is ...
3k views

### Binary American Call Option (Cash or Nothing)

Suppose we have a stock with current price $S(0)=X$ and the interest rate is zero. When the stock reaches level $\$ H$for the first time ($H>X$), the option can be exercised and its payoff is$\\$ ...