Digital 100 options are yes or no bets with a fixed payoff. At expiry, the option either settles at a full payout, often quoted as 100, or at zero. You know the exact profit or loss in advance, down to the last unit of account, before you click buy or sell.

That makes them different from standard options where the payoff moves with the size of the move in the underlying. A call or put on an index keeps gaining value as the index moves further in your direction. With a Digital 100, the question is simpler. Was your statement about the market correct at expiry or not.

Because the payoff is binary, the pricing is closely tied to the market’s implied probability of an event. If a Digital 100 option is trading at 45, the market is saying there is roughly a 45 percent chance that the statement the option represents will be true at expiry, ignoring fees and spreads. Traders can then decide if they think that probability is too low or too high.

Many short term speculators like this set up. You can see the maximum loss and maximum gain on screen, you are not worrying about how far the market moves, you just care that it gets to where you predicted or stays away from it. That clarity often makes risk planning a bit less stressful, even if your heart rate during the last few seconds of a 60 second bet might not agree.

Digital hundreds are similar to binary options. If you do not know what a binary option is, then you can learn more about binary options by visiting the website Binary Options.

How the Payout Works and Why Traders Like It

A Digital 100 option pays a fixed amount if it expires “in the money” and zero if it expires “out of the money”. The “100” label usually refers to the full settlement value. If you buy at 40 and the option settles at 100, you make 60 per contract. If it settles at zero, you lose the 40 you paid, plus any costs.

On the sell side, you can also open a short position in many platforms. In that case you might sell at 60, hoping the option settles at zero and you keep the 60. If the event happens and the option settles at 100, you lose 40. Mechanically this looks very similar to buying and selling probability tickets.

Pricing tends to cluster around the implied probability at expiry, but spread, platform fees and hedging costs for the broker distort it. A Digital 100 quoted at 60 is not telling you there is a perfect 60 percent probability. It is telling you that you will pay 60 now to receive 100 if you are right, and that the other side of that trade exists at whatever bid price is showing.

The payoff profile is easy to draw mentally. For a buyer, the payoff is flat at minus the stake for all outcomes where the condition is false, and jumps straight to plus the reward when the condition is true. There is no gradual slope or curved shape like you see with vanilla calls and puts.

This all or nothing structure appeals to traders who like to think in probabilities and fixed risk. It also appeals to traders who are tempted to overtrade very short time frames. The instrument itself does not fix discipline, but at least it does not hide the risk, it sits right there on the ticket.

Underlyings for Digital 100 Options

Digital 100 options are derivatives. The price of each contract comes from one or more underlyings.

Brokers can build Digital 100 contracts on equity prices, stock indices, commodity futures, currency pairs, cryptocurrency rates, other derivatives and even non price data such as official sales numbers or macro data prints. As long as there is a clear number that can be observed and verified, it can be used.

In practice, most traders see Digital 100s on major forex pairs, large equity indices, leading commodities, a few headline cryptocurrencies and some popular single stocks. Liquidity and hedging cost matter for the broker, so you rarely see long lists of very illiquid underlyings with active quotes.

From the trader side, the choice of underlying is less about the structure of the Digital 100 and more about your read of that market. If you already trade EUR USD or an index future, a Digital 100 on the same price feed simply gives you another way to express the same view.

Lifespan and Expiry Choices

One reason Digital 100 options pull in active traders is the choice of very short term expiries. Some contracts expire thirty seconds after purchase, others at one minute or five minute intervals. End of hour, end of trading session and end of calendar day are also common. On the longer side, you can find contracts that run for several days, weeks and sometimes out to year end.

Short duration contracts are used by traders who want to express a view on noise and tiny swings, not just the main trend. A quick spike or fade in an index around a news release might only last seconds. A Digital 100 that settles at the end of that burst allows very concentrated exposure.

End of day contracts are more popular with traders who use levels on daily charts and do not want to watch every tick. They might set an opinion that the index will finish above a given level today, buy or sell a relevant contract, then check back near the close. The option does not care if the market swings wildly in the middle of the session, only where it is at the settlement moment.

Longer duration Digital 100s sometimes suit swing traders who prefer a simple event statement. Instead of buying a multi month vanilla call, they might buy a Digital 100 that pays out if the index finishes above a level on a chosen date. The payoff is simpler, the risk is capped to the stake, but of course you do not gain extra money from a large move above that level.

Choosing expiry is really choosing what kind of price movement you want to bet on. Short expiries focus you on noise and micro structure. Longer expiries tie you to broader moves, macro data and events that play out over days and weeks.

Main Digital 100 Structures

Most trading platforms that offer Digital 100s present a handful of core structures. The names vary a bit by broker, but the ideas are similar. You will usually recognise a Higher or Lower contract, a Touch or No Touch contract and a Range or Boundary contract.

Higher / Lower

Higher or Lower contracts ask a simple question. At expiry, will the underlying price be above or below the chosen level compared with the price or level used at the time you opened the contract.

If you buy a Higher contract, you win the payout if the final price is above the level. If you sell it, you win if the final price finishes at or below. The opposite applies for Lower contracts. The broker defines the exact rules, including what happens if the price finishes exactly at the level.

This structure is probably the most familiar version of a Digital 100 for most traders, because it behaves like a very simplified call or put. You are not rewarded more for a huge move. One tick above or one percent above both pay the same. That means your edge comes from getting the direction right more often than the price on the screen suggests, not from catching monster trends.

Touch / No Touch

Touch or No Touch contracts ask whether the underlying price will reach a level at any point during the life of the option.

With a Touch contract, you receive the payout as soon as the price touches the barrier. The contract finishes there and then, no need to wait for expiry. Some traders open a Touch contract and then see a sudden payout appear in their account while they are looking at something else. Nice surprise when it goes your way.

With a No Touch contract, you win if the price never reaches the barrier before expiry. If it touches the level even once, the No Touch contract will settle at zero.

Touch structures encourage traders to think about volatility and speed. You can be wrong on the eventual direction of the market and still win on a Touch contract if the price spikes through your level before reversing. That can be a blessing or a curse, depending how honest your mental accounting is.

Range (In / Out, Boundary)

Range or Boundary Digital 100s focus on whether the price stays inside or outside a band.

The broker defines two levels, an upper and a lower boundary. An In contract pays out if the underlying is inside the band at expiry, an Out contract pays if it is outside. Some versions use intra period touches as triggers, others only care about the final reading, so it is worth reading the small print.

Compared with simple Higher or Lower contracts, Range structures ask you to judge both direction and volatility. You are not only saying that the price will be higher or lower, you are also saying that the move will keep the price inside or push it outside a band. Because of this extra condition, brokers often quote higher payouts for these contracts relative to Higher or Lower ones at similar distance from the current price.

Exotic Digital 100 Structures

Beyond the vanilla structures, some brokers offer more unusual Digital 100s. These are less common, liquidity can be thinner, and the rules matter a lot. They can still be useful if you have a clear view on how price will behave within a band or relative to another market.

Double No Touch Digital 100 Option

A Double No Touch Digital 100 option sets two barrier levels and pays out if the underlying price never touches either barrier during the life of the option.

Take a simple EUR USD example. The pair trades around 1.2400 and you believe it will trade quietly inside a narrow area for the next forty eight hours. A broker offers a Double No Touch with lower barrier at 1.1500 and upper barrier at 1.3500. If the price never reaches either of those levels before expiry, the option settles at the full 100 payout. One touch of either level and the settlement drops to zero.

This structure suits range traders who believe volatility will stay low and that no surprise event will push the market through the wider band. It is also a quick way to donate money to the broker if you underestimate how far prices can travel during an unexpected data release.

Outperformance Digital 100 Option

An Outperformance Digital 100 option compares the performance of two underlyings over a set period.

You might see a contract that asks whether the FTSE 100 index will outperform the S and P Asia 50 index over the next two weeks. The option defines outperformance in a clear way, often as a larger percentage gain over the period. If the FTSE does better by that measure, the contract settles at 100. If not, it settles at zero.

For traders who already think in relative value terms, this kind of contract is handy. Instead of building a manual pair trade, buying one index future and selling another, you can use a single Digital 100 that pays out if your relative view is correct. Of course, you lose the ability to manage each leg separately.

Ladder Digital 100 Option

A Ladder Digital 100 option uses a set of price levels spaced out like the rungs of a ladder, each tied to a point in time.

The broker might define a series of levels for an index, one level for each hour of the trading session. To receive the full payout, the price needs to be above each level at each checkpoint, like climbing the ladder step by step without missing one. Some versions flip the logic and require the price to stay below each level instead.

Certain ladder options only pay if the entire path is correct. Miss one rung and the payout falls to zero. Others pay a portion of the full amount for each rung that is hit correctly. The exact terms vary by platform, so reading the product description is not optional here.

This structure forces traders to think not just about where the price might be at a single expiry, but about the path it might take along the way.

Strategy Ideas and Practical Use Cases

Digital 100 options can slot into several trading styles, from quick speculation to short term hedging. The right and wrong uses tend to come from trader behaviour, not from the instrument itself.

A classic use is short term directional trading around data releases or scheduled events. A trader might buy a Higher Digital 100 on an index ahead of a central bank announcement, with expiry five minutes after the event. If they expect a sharp move up but do not want the risk of getting stopped out by noise before the move, a binary style payoff can feel cleaner.

Another use is expressing a volatility view without complex option spreads. A trader who believes a currency pair will stay quiet over the next session could buy a No Touch or Double No Touch. A trader who expects a spike through a level without caring about the final close might choose a Touch contract.

Some traders also use Digital 100s to hedge other positions. Suppose you are long an index future and worry about a short term pullback around a data release. Buying a Lower Digital 100 with a nearby expiry that pays out if the index closes below a level can offset some of the pain from that pullback, while leaving your main position intact if the market keeps rising.

Digital 100s also encourage clear thinking about probability. Writing down your implied probability for an event, then checking it against the market price of the contract, can be a useful habit. If you consistently think there is a 70 percent chance of something that the market prices at 40, either you have an edge or your confidence needs a reality check.

Risk, Costs and Broker Terms

The fixed payoff does not remove risk; it just makes the numbers more visible. You can still overbet. You can still blow up an account by taking repeated all or nothing bets on short expiries.

Because the payoff is capped, brokers build their margin into pricing. The spread between bid and ask prices, and any fees, reduce the fair value you receive. Two contracts that look similar can have very different cost structures from different providers.

Settlement rules are also important. You should know whether expiry is based on the last traded price, a mid price, an official fix, or some average. You should know what happens if the underlying touches a level by a fraction of a point or tick. Small wording differences in the contract text can decide whether you are paid or not in a tight situation.

There is also behavioural risk. Very short term Digital 100s can feel like a fast game, and the neat numbers on screen can give a false sense of control. A run of losses on one minute bets can hurt as much as a big loss on a longer position, it just arrives in many small chunks.

Risk management with Digital 100s still comes down to size, frequency, and having a sane reason for each trade. Fixed payoff does not replace a plan.

Digital 100s vs Other Products

Compared with a vanilla options contract, a Digital 100 has a much simpler payoff. A call option becomes more valuable the further the underlying moves above the strike, while a digital pays the same amount whether it finishes one tick or fifty ticks in the money. You trade probability, not magnitude.

If you trade standard options, the path from payoff to pricing runs through delta, gamma, volatility, time decay and the rest of the familiar Greeks. With Digital 100s the focus is on the chance of an event by a given time. There is still an implied volatility behind that, but it is wrapped in a single number that traders can read as an implied probability.

You will sometimes see Digital 100s discussed in the same breath as binary options that have been used on unregulated offshore platforms with very poor practice. Reputable providers quote prices on regulated markets or as part of a supervised spread betting service. The instrument type is not the problem on its own, the question is who sits on the other side and how they run the book.

For traders who already deal with options, it can help to think of a Digital 100 as a special case of an option that pays a fixed amount if the underlying finishes beyond a trigger. It has no time value beyond that event. For a trader used to standard contracts, such as a traditional option on a stock or index, the digital format feels like someone has removed a lot of moving parts and kept only the yes or no part of the trade.

Final Thoughts for Active Traders

Digital 100 options give traders a clean way to express a view on an event with a fixed payoff. They ask very clear questions. Will the market finish above this line. Will it touch that level before this time. Will this index beat that one over the next fortnight.

For some traders, that clarity improves discipline. You see the stake. You see the reward. You know the time frame. For others, the same features make it dangerously tempting to trade too often on very short expiries.

If you already have a view on direction, volatility, and time, adding Digital 100s to your tool set can make sense, as long as you treat them with the same respect as any other leveraged product. The market does not care that the contract name sounds simple.

This article was last updated on: February 17, 2026