Cash-or-nothing options are a type of exotic option that pays a fixed amount of cash if the option is in-the-money at expiration, and zero if it is out-of-the-money. This unique payoff structure distinguishes them from standard options, making them appealing in specific financial strategies where investors seek defined cash payouts rather than ownership of the underlying asset. They can be used for hedging or speculative purposes, depending on market conditions and investor objectives.
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