European digital put option

A double digital option is a particular variety of option a financial derivative.

At maturity, the payoff is 1 if the spot price of the underlying asset is between two numbers, the lower and upper strikes of the option; otherwise, it is 0. A double digital option is similar to the exotic option with a few exceptions. The option has two types of strikes namely the lower and the upper strikes.

A double digital with lower strike K 1 and upper strike K 2 can be replicated by going long a digital option with strike K 1 and short another digital option with strike K 2. From Wikipedia, the free encyclopedia.

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Double digital option - Wikipedia

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Exotic Option

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Digital Option

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