Money or nothing binary choice is a means of rewarding a trader because of their powerful prediction of the management of the cost on the industry. The trader gets nothing or cash as we understand there are two results of a commerce, loss or profit, and consequently on the prediction of the cost management. There’s another form of binary choice by the title of “nothing or asset”. This means that the return by means of strength in the event of a prediction. The classification is dependent on the essence of what a trader receives due to their prediction that was right.
Actually money or nothing gold choice the trader receives a predetermined quantity of money if his commerce is “at the money” and he also receives nothing when his commerce is currently “out of cash”. This sort of choice follows the kind of choice trading in which the commerce is paid off in the expiry date. This implies that the purchase price of the safety that is traded does hit the strike price the trader wouldn’t receive anything. It’s just about the expiration date which the security’s cost will be compared to the strike cost. This phenomenon could be explained with the illustration.
(b)A trader creates a cost of money or nothing binary possibilities for a stock which has the strike cost of $($*****) along with the reward is always $25000. Now if at the expiration date that the stock is trading over $($*****), then the trader could earn money of $($ $****) however when the stock market is trading under $($*****), then the trader could receive nothing.