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in this section we are going to have a look at a particular exotic option called binary options now binary options there are mainly two types of binary options the first one is called cache or nothing binary options and also you have something called asset or nothing binary options now the first thing to understand is that the word binary as you can imagine its one of the one of two results either its a yes or no its true or false basically binary means its one of the two so its either yes or no or true or false so when we talk about binary options especially cash or nothing binary options now the way it works is if there is a payoff its always a fixed amount so here we have a cash or nothing call option and here we have a cash or nothing put option but the first thing to remember is that when you talk about a cash or nothing binary option the payoff is always a fixed amount or its zero otherwise so remember now if we take a normal in other words a plain vanilla call option as y