Binary Options Terms List
The following article presents the explanations of the most critical terms, which relate to the sphere of trading. Getting acquainted with them enhances your chances for success.
Asset – the subject a binary option is based on. It can be a stock, a currency, an index, etc.
Binary options – a complicated concept, which may be defined as the method of online-based investing that presupposes set return rate and a fixed expiration period. Due to their uncomplicated functioning, binary options became extremely popular among many traders.
Broker – a trading platform (the set of companies), which establish a specific way of binary options investing. Without a broker, one can not place trades on binary options.
Current rate – the notion is used to define the actual value of a certain asset.
Range option – may, alternatively, be called “a zone option.” The concept implied the limitation placed by certain companies on zones.
Expiry – the term of expiration denotes the moment (time & date) until which an asset has to embrace certain value.
High/Call Option – the standard BO category, that introduces options presupposing the rise of an asset value.
Low/Put Option – these are binary options that show downward movements in asset pricing.
In-the-Money – the expression implies a winning position of a trader, which may be reached in case the asset value is predicted correctly.
Out-of-the-Money – the term denoting the opposite position; this is losing a trade as a result of making a wrong prediction.
Rate of Profit – the fixed amount of money, which is received by a trader in case he/she wins a trade, in accordance with the preliminary agreement.
Fundamental analysis – the most basic definition of this term would be the method of evaluating asset fluctuations. The estimation of the target indicators is dependent on multiple factors. These can be the changes of the market patterns, as well as some political, economic, and demographic events.
Technical analysis – the definition of this term, as well as the previous one, requires detailed explication. The basic explanation marks this type of analysis as the tool of analyzing trading charts that present the changes in asset movements. It does not take in consideration any fundamental analysis factors but focuses on the historical pricing and volumes.