A Put (Lower) option in digital options is a type of contract that you buy when you expect the price at expiration to be below the strike price. Simply put, when choosing this contract, you expect the price to move down. If this happens, you will capitalize on the price change (85%+ of your investment amount), while if the price moves above the strike price, you will lose.

Example

A market participant is analyzing the WTI oil quotes, which are currently trading at 65.00. They decide that the quotes will move below within 5 minutes. The trader opens a Put (Lower) contract with $100 and sets expiration at 5 minutes. The price hits 64.98 in five minutes, which means that the trader gains profit. Should the price reach 65.01, the option will close at no profit.

How to Buy Put (Lower) Options on the Binolla Platform

To buy a Lower contract on the Binolla platform, you need to do the following:

1. Choose an asset and the contract type at the top of the screen.
2. Indicate how much you are going to invest in a trade.
3. Choose expiration.
4. Press the Lower button to initiate the trade.

Strategies for Buying the Lower Contract

If you want to know when to buy the Put (Lower) option, then you should learn some basic strategies:

• Trend-following strategies. Traders can check the major trend and place Put (Lower) contracts if the downtrend is confirmed. This strategy works best with moving averages, Bollinger Bands, and trendlines.
• Breakout strategies. Traders buy the Put (Lower) contract when the price moves below the support level. To apply this strategy, they can use bearish flags, bearish channels, moving averages, Bollinger Bands, and other tools.
• Reversal strategies. This strategy is applicable when the trend changes from upside to downside. Traders use reversal candlestick patterns like the shooting star, the evening star, bearish engulfing, as well as H&S, Double, and triple bottom, and others.