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Glossary

Asset

Underlying assets (in binary options trading) are currency pairs, stocks, commodities and indices.

 

At-the-money

At-the-money result presupposes that the price of an underlying asset at the moment of expiry is the same as the strike price. For a trader, this means that the sum invested is returned (no profit or loss).

 

“Call” (Above) Option

A trader chooses this option when he/she predicts that the price of the underlying asset will go up.

 

Binary Options

Binary options (all-or-nothing options) are contracts with only 2 possible outcomes (win or loss).

 

Expiry Price

This is the price at which the underlying asset closes at the expiry time.

 

Expiry Time

The time and date at which a binary option expires and the result of the trade is determined.

 

Investment Amount

It is the sum invested per trade. Since the returns in binary options are fixed, you always know how much you can potentially win or lose.

 

Managed Accounts

These are accounts that are managed by professional traders who place trades on your account and make money for you.

 

In-the-money

This is a binary options trade that results in profit. Basically, it occurs when trader’s prediction turns out to be correct.

 

Out-of-the-money

This is a binary options trade that results in loss. Basically, it occurs when trader’s prediction turns out to be incorrect.

 

“Put” (Below) Option

A trader chooses this option when he/she predicts that the price of the underlying asset will go down.

 

Strike Price

It is the price of the underlying asset at the moment of the option purchase. Strike price and expiry price are compared at the moment of expiry to determine if the trade won or lost.