Binary Options Terminology

Binary option in simple words, Binary Options Trading Glossary - Complete Dictionary for Binary Options

Note that the binary trading lingo found on this page covers all of the major binary options platforms.

Binary options depend on the outcome of a "yes or no" proposition, hence the name "binary. At the time of expiry, the price of the underlying asset must be on the correct side of the strike price based on the trade taken for the trader to make a profit. A binary option automatically exercisesmeaning the gain or loss on the trade is automatically credited or debited to the trader's account when the option expires.

Asset — The instrument that underlies the trade. Binary options are traded based on stocks, commodities, currency pairs, and indices.

Trading Binary Options

At The Money — Describes a binary option for which the price at expiration equals its strike price. There is no gain or loss for the trader. Broker — Binary options brokers host the trading platforms from which you can execute trades. Before you can trade binary options, you must register an account with a broker.

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Call Option — A type of binary option that becomes profitable when the unit price of binary option in simple words underlying asset rises above its strike price at expiration.

It is a tool often used to aid in technical analysis. Commodities — Basic goods that are either grown — e. The price of the binary option changes as the exchange rate between the two currencies moves up and down.

Introduction Video – How to Trade Binary Options

Expiry Time or Expiration — The point at which the binary option expires. Every binary option comes with setod dhow trading predetermined expiry time.

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Fibonacci Retracements — Fibs or fib lines are created via measuring very specific points in a price movement. These are used as an indicator to help determine what a price is likely to do.

Macroeconomic signals include interest rates, unemployment rates, and inflation.

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Microeconomic factors are those that affect supply and demand. In The Money — Describes a binary option that is profitable for the trader.

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Index or Indices — Comprised of multiple stocks. A call option is out of the money when the price of its underlying asset at expiration is less than its strike price. Platform — Used by binary options brokers to allow individual traders to executes trades.

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Although the major platforms are similar in many ways, each also presents unique features. Put Option — A type of binary option that becomes profitable when the unit price of the underlying asset falls below its strike price at expiration.

Rebate or Refund — The binary option in simple words returned to the trader if a binary option expires out of the money.

  1. Terminals for trading
  2. Regulation and fraud[ edit ] Further information: Securities fraud Many binary option "brokers" have been exposed as fraudulent operations.
  3. Live graphics of binary options
  4. Trading signals binary options
  5. Binary options offered by NADEX are based on 4 different asset classes: stock index futures spot forex economic data releases.

Typically, the rebate is expressed as a percentage of the investment amount. Strike Price — The price of the underlying asset at the time a binary option is exercised.

Technical Analysis — A method of analysis that uses previous market data to identify trends and forecast the future price of an underlying asset.

What is a Binary Option and How Do You Make Money?

Signals like trading volume and price are charted in order to note probabilities of future price performance. Trading Minimum — The minimum amount required to execute a binary option.

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Instead, become reasonably familiar with them and refer to this page whenever the need arises. We'll not accept liability for any losses incurred by relying either directly or indirectly on the information provided on this website.

Let us take them one after the other. Expiry times can be as low as 5 minutes. How does it work?

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