Glossary

We highly recommend that you first get used to the trading language in order to increase your understanding of the world of binary options and the markets.In this section, we have compiled a brief overview of the most important terms and their meanings to help you understand everything you’ll see in any trading platform.

 

Asset Class
In binary options, this is the category of financial securities. The classes include currencies, stocks, commodities and indices.

 

At the Money
The term used to describe when the price of an asset at expiry is the same when it was purchased.

 

Binary Option
This is a type of option that offers a fixed profitfor correctly predicting if the price of an underlying asset reaches either above or below a set strike price in a specific time.

 

Call Option
This is a prediction that the asset’s price at expiration will be higher than its price when it was purchased.

 

Current Price
The last price of an asset based on real time data. Some brokers may experience delays of at least 15 minutes.

 

Expiry Price
This is the price of the asset during the expiry time and the basis whether the option makes a profit or loss.

 

Expiry Time
This is themonth, day or hour when the option expires.

 

Exotic Options
These are the more complex versions of binary options which used to be traded on exclusive markets.

 

Fundamental Analysis
The process of determining the true value of tradable assets by analyzing and evaluating the real world factors that affects companies, industries, indices and economies.

 

Investment Amount
This is the amount of money that is invested in an option.

 

In-the-Money
The term used to describe when the price of an asset at expiry is higher when it was purchased.

 

One Touch Option
An option type which is based on predicting whether the price of an asset will touches a predefined price level. The price of the asset needs to reach or surpass the predefined price level only oncein order to be In-the-Money.

 

Out-of-the-Money
The term used to describe when the price of an asset at expiry is lower when it was purchased.

 

Payout
Theamount of profit that is given to the trader if the option expires In-the-Money.

 

Put Option
This is a prediction that the asset’s price at expiration will be lower than its price when it was purchased.

 

Strike Price
The price of the assetat the time the trade started. At expiry, this is compared to the expiry price to determine if it is In-the-Money or Out-of-the-Money.

 

Underlying Asset
The specific asset which the trader has placed an investment in a binary option. This could bea currency, stock, commodityor index.

 

 

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