Digital Option
An option whose payout is fixed after the underlying stock exceeds the predetermined threshold or strike price. Also referred to as "binary" or "all-or-nothing option."
Investopedia Commentary
The value of the payout is determined at the onset of the contract and doesn't depend on the magnitude by which the price of the underlying moves. So, whether you are in the money by $1 or $5, the amount that you receive will be the same.
Related Links
Options Basics Tutorial
See also: Call, In the Money, Intrinsic Value, Out of the Money, Put, Strike Price