Trading Basics
Digital Options
A digital option pays out a fixed amount when the price of an instrument moves past the strike price with a set timeframe.
Other Trading Basics
Controlled Risk Bet
A trade where the maximum downside is predefined, usually with a guaranteed stop-loss order.
Backwardation
Backwardation occurs when a bid price exceeds the ask price.
This usually occurs when stock is suspended or under a share repurchase scheme.
It can also mean that a futures contract will trade at a higher price when it is coming close to expiring.
The opposite of backwardation is known as contango.
Start learning
Learn the skills needed to trade the markets on our Trading for Beginners course.
