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Consider two digital barrier options:
One gives off 1 at expiry so long as the underlying spot reaches some level before expiry
The other gives 1 immediately when the underlying spot hits that level
Of course these two options should have separate value.
I assume the first have a textbook solution, but how can we evaluate the second?
One gives off 1 at expiry so long as the underlying spot reaches some level before expiry
The other gives 1 immediately when the underlying spot hits that level
Of course these two options should have separate value.
I assume the first have a textbook solution, but how can we evaluate the second?