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hello there this video continues my sub series on exotic options youll recall exotic options is a catch-all category because they are defined as any options that are not standard or vanilla I say its a sub series because theyre in their own playlist and the broader sequence is part one topic three of the frm that topic three is called financial products and markets so thats the broader sequence but within this sub series for exotics of this playlist Ive already recorded three videos compound on respectively compound barrier and chooser options and this video then gets me to binary options which are also called digital options and youll see all up for more to go after that and so I will explain the mechanics of a binary aka digital option and then the end Ill show the intuition how we can use the intuition of these digital options to actually understand how we price or value them so first Id just like to remind you of the payoff plot for a long call option Illustrated here righ