Digital 100's

[novice0001]

Hi

 I'm very new to trading Digital 100's and would like to know if there is any info anywhere explaining how the whole process works. "How price is taken" and "selling early" etc? Thanks in advance.

[Zero]

Hi novice0001

 

I'm not sure if there is any info anywhere explaining the whole process.  There used to be some examples when they were called binaries - the IG website had some trade examples.  

The selling early that you quote would mean that you can sell them any time up to the expiry (or the lockout before expiry - normally 1min for 20min digital 100's or 10mins for the end of day ASX digital 100's).  So if you get in and think you've made a dud trade, you can close it out and minimize your expected loss.  Or vice versa, you can take profits before expiry.  

 

It sort of helps if you have a feel for options. The digital 100's were once called binary options - so a type of options contract - and they are priced using a similar method (quite complex maths).  But the standard elements of an option are still there for the digital 100 - time decay, an expiry time and price.

 

In my opinion, you need to first be able to understand the market you're trading (for me the ASX200).  If you have a good feel for how the price moves for it - then you can fit a digital 100 to any condition at almost any time to trade it.  

 

People here on the forum should be helpful if you need further explanation on how the whole process for digital 100's work anyway. Cheers.

[novice0001]

Hi

Thanks very much for reply, your info is very helpful