One of the most important factors when learning binary options is to get acquainted with the binary vocabulary. Before you leap into the trading zone, it’s important that you know some of the basic binary options terminologies for you to fully understand the premise behind this form of trading. If you know your way around OptionTime binary options trading, you can probably skip this section. However if you’re new, or have come across a particular term you’re unfamiliar with, here’s a complete OptionTime glossary for you to utilize and memorize.
Mastering the language in any kind of business is an important factor. You need to know what people are talking about as well as the information you’re reading. The same thing goes with OptionTime binary options trading. If you would like to further your understanding of the markets, we advise you to learn the lingo used in OptionTime binary options trading and this can be achieved through our comprehensive OptionTime binary options glossary. Here you will find the definition of terms and phrases used in our trading platform and in the world of binary options trading in general.
To give you a head start, here are some of the basic terms and phrases you need to know by now:
Assets – This refers to anything that’s traded on a global market. Stocks, commodities, currency pairs and indices are considered to be major OptionTime asset classes. This could be anything from shares from leading technology firms like Google and Apple to popular commodities such as gold and oil.
Binary Options – Also known as digital options, or all-or-nothing options, binary options is a financial instrument that offers a fixed rate of return that’s predetermined before you execute the trade. It has two possible outcomes, either you win (in-the-money) or lose (out of-the-money).
Call Option – This refers to a binary option type in which the trader believes the market price of an underlying asset will expire above the current market price.
Put Option – A Put option refers to a binary option in which the trader believes the market price of an underlying asset will expire below the current market price.
Market Price – Also called the Strike Price, the market price is determined by the price of an underlying asset at the moment at which the option is purchased. When the option expires, the price of an underlying asset is compared to the market price to figure out whether the option has gained value or lost value.
In-the-Money – An option is declared in-the-money if the option acquires value upon expiration. A Put option is in-the-money if the price of an underlying asset is below the market price, while the Call option is in-the-money if the price of an underlying asset is above the market price.
Out-of-the-Money – An option is said to be out-of-the-money if the market price of an underlying asset is not currently trading at the target. If your prediction is incorrect, your trade will be considered out-of-the-money at the end of your option’s expiry time.
The OptionTime binary options glossary was created to address common questions and issues about the terminologies used throughout our site. If you have any questions not addressed in our OptionTime glossary, contact us via phone, e-mail or live chat.