# Digital Options

## Digital Options Overview

A **Digital Call Option** pays off a fixed amount **if underlying asset price ends up above** a certain level at expiry. 

A **Digital Put Option** pays off a fixed amount **if underlying asset price ends up below** a certain level at expiry. 

## Placing Digital Option Orders

<figure><img src="/files/yaypSuiI70I8T4OBFprP" alt=""><figcaption></figcaption></figure>

1. In the **Market** tab, select Digital Options
2. Enter your order parameters
   * **Type:** enter the contract you want to trade: CALL or  PUT&#x20;
   * **Side:**  "+" indicates a LONG/BUY position on the contract selected, "–" indicates a SHORT/SELL position on the contract selected. \
     (Note: a LONG PUT position is a SHORT position on the underlier)&#x20;
   * **Size:** The exposure equivalent of your desired asset. Entering 1 means you are trading an option contract for one unit of the underlier.&#x20;
   * **Strike:** The option strike price which will determine the payoff at maturity.&#x20;
   * **Unit Price:** This is the order limit price which will be entered into the auction. The system feeds a  suggested price, which is a theoretical mid price based on Ithaca protocol proprietary pricing model: these prices are not tradable neither are they guaranteeing a fill of entered. These prices are meant to help anchor a limit price to be entered that may have higher probability of a match. The indicated  implied volatility is calculated by the same model.&#x20;
3. Verify Order Summary
   * Order limit: Order price
   * Collateral requirement: The amount required to be locked so as to ensure that the order enters the auction.&#x20;
   * Platform fee: Fee to be paid in case of execution.&#x20;
   * Total premium: The total to be paid net of fees.&#x20;
4. "Submit to Auction" and approve your transaction in your wallet

## Digital Options Contract

<table><thead><tr><th width="202">Item</th><th>Description</th></tr></thead><tbody><tr><td>Products</td><td><p>Binary Call Option (Binary Call)</p><p>Binary Put Option (Binary Put)</p></td></tr><tr><td>Payout Formula</td><td>Call    if Reference Price > Strike then 1, else 0<br>Put     if Reference Price &#x3C;= Strike then 1, else 0</td></tr><tr><td>Underlying</td><td>WETH/USDC</td></tr><tr><td>Settlement Style</td><td>Ithaca settlement</td></tr><tr><td>Premium Currency</td><td>USDC</td></tr><tr><td>Strike Currency</td><td>USDC</td></tr><tr><td>Collateral Currency</td><td><p>Call    USDC</p><p>Put     USDC</p></td></tr><tr><td>Collateral Amount</td><td><p>Call    1 </p><p>Put     1</p></td></tr><tr><td>Collateral Management</td><td>Fully collateralized, pre-funded</td></tr><tr><td>Multiplier</td><td>1</td></tr><tr><td>Reference Price</td><td>ITHACA Reference Fixing</td></tr><tr><td>Expiry Dates</td><td>( Ithaca Expiry )</td></tr></tbody></table>

<br>


---

# Agent Instructions: Querying This Documentation

If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter:

```
GET https://docs.ithacaprotocol.io/docs/ithaca-app/trading/market/digital-options.md?ask=<question>
```

The question should be specific, self-contained, and written in natural language.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.