[Fegu]

Key product features

• Pays a rebate if spot is beyond a predetermined level at expiry, called the “barrier”.
• Upfront premium.
• Limited upside/downside.

Product description/scenario

• A Digital Option pays out a rebate if spot fixes at or beyond a predetermined barrier rate at expiry.
• Digitals can facilitate both bullish (Digital Call) and bearish (Digital Put) views.

Example trade profile


Payout profile at expiry


Payoff description

• If spot on the maturity date is:
– At or above the barrier rate (1.4200), a rebate of EUR 1mio will be paid out.
– Below the barrier rate (1.4200) no rebate will be paid.

Variations

• Discrete Digital:
– The barrier is only live on predetermined discrete points in time throughout the life of the option.

• Dual Digital:
– Based on the same principal as the Digital, however it pays out only if two different currency pairs are at or beyond their respective barrier levels at expiry. The option can include both Calls and Puts.