What does "Trigger" mean?

In the context of DNT (Double No Touch) Options trading for crypto, the term "trigger" typically refers to the specific price level or event that activates or initiates a particular action within the options contract. This action is what causes the option to either pay out or result in a loss, depending on whether the price reaches or touches the predefined levels.

Here's how "trigger" works in DNT Options:

If the price exceeds a specific level (the positive and negative values below the trigger box), it could trigger a loss for the trade.

In other words, when the price "touches" or "breaks" through the trigger level, the trade outcome is determined, and the option expires.

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What do the index numbers mean?

Using the above screenshot as an example, the terms "index -40.0" and "index +40.0" in the "trigger" section refer to specific price levels or price movements relative to the current market price of the cryptocurrency (such as Bitcoin or Ethereum) that act as triggers for the option.

Let’s break it down:

"Index -40.0" and "Index +40.0"

• "Index" in this case likely refers to the current price of the cryptocurrency relative to a baseline value (often the current price).

• "Index -40.0" means the trigger level is 40 points below the current price.

• "Index +40.0" means the trigger level is 40 points above the current price.

Example:

If Bitcoin is currently priced at $30,000, here's how the "index" values would work:

• "Index -40.0": This means the price level is set 40 points lower than the current price, or $29,960 (30,000 - 40).

• "Index +40.0": This means the price level is set 40 points higher than the current price, or $30,040 (30,000 + 40).

These levels become important in the context of Double No Touch (DNT) Options. With a DNT Option, you are betting that the price won’t touch or reach these trigger levels (-40.0 or +40.0) within a certain time frame. If the price touches or exceeds either of these levels, the option would trigger a loss for the position.

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Summary:

• "Trigger" refers to the price level or event that activates a specific action in the trade (either a payout or a loss).

• In DNT options, a trigger is the price point where, if reached, the option either becomes invalid or results in a loss.

• Understanding triggers helps you track when your option might expire or activate based on the price movement of the asset (crypto in this case).