Exotic Options
Exotic Options with SXM include Asian, Digital and Barrier options.
- Asian options determine payout by figuring the average of the underlying price over a pre-set period of time. (Example: an average of the futures settlement each Friday for a month.)
- Digital options (a.k.a Binary or All-Or-Nothing options) pay the owner a fixed amount if the market settles at a predetermined level. Conversely, if it does not settle at that level, the owner receives nothing.
- Barrier options are based on the market touching a pre-determined level where the option is either activated (knocked-in) or deactivated (knocked-out).