Binary Options Glossary
A stock, commodity, index or forex pair.
If the option expiry price is similar to the option buying price than the investment amount is returned fully to the investor.
The main differences between binary options and traditional option is that Binary options are generally priced lower than traditional options.
This is because the payout for a binary option is fixed whereas the payout for a traditional option varies according to the value of the underlying asset.
“Call” (Above) Option
An option that provides the trader with a fixed profit when the underlying asset is higher at the time of expiration than at the time it was purchased.
The last price according to real time data unless otherwise is stated.
Another name for binary options, digital options typically refer to binary options that have fixed odds.
Expiry Time (Time of Expiration)
The time and date at which an option expires and the trade is determined to be in-the-money or out-of-the money.
Traders use fundamental analysis to determine how macro-economic factors will influence the value of an option.
For a Call option (Above / Below), when the strike price is above the market price for the underlying asset.
For a Put option (Above / Below), when the strike price is below the market price for the underlying asset.
For a Call option (Above / Below), when the strike price is higher than the market price for the underlying asset.
For a Put option (Above / Below), when the strike price is lower than the market price for the underlying asset.
“Put” (Below) Option
An option that provides the trader with a fixed profit when the underlying asset price is lower than the price it was purchased at the time of expiration.
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One of the tree types of binary options available in Binary trade rooms. With range options the trader must predict if an asset price will be “In” or “Out” of a predetermined range at the time of expiration.
For example: an investment of 1000$ the return will be 1750$.
The price that an underlying asset much touch in order to be in-the-money or out-of-the money.
Technical analysis is based on charts and statistics. Traders use technical analysis to predict the future movements of options based on their past performance.
With touch options the trader must predict if an asset price will touch a predetermined strike before the time of expiration.