Binary Options Glossary – Definitions Of Common Binary Options Terms

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Binary Options Glossary – Definitions Of Common Binary Options Terms

60 Seconds Option – A CFDs, Forex and Option that has an expiry time of 60 seconds

At-the-Money – This is a term used to describe an option’s ability to yield financial profits. When the option is At the Money it means that the option’s target price and underlying asset price are identical. If the option expires in this situation, your initial investment is refunded

CFDs, Forex and Option – This is a specific type of option that offers a fixed payout for correctly predicting whether an asset’s value will rise or fall by a certain time

Boundary Instrument – A tool used by a trader to help predict whether the underlying asset’s value will expire within or out of a set range of values

Early Closure – A uTrader option in which traders can exit an already purchased option before it expires and receive a reduced return

Expiry Level – This term refers to the value of an underlying asset when the option expires

Expiry Time – The predetermined date and hour when the option expires

High Option – One of the two choices for a trader investing in a High/Low option. The trader will profit if the underlying asset’s value expires higher than the target price of the option

High/Low Option – A CFDs, Forex and Options trading instrument in which the investor predicts whether the underlying asset’s value will expire higher (above) or lower (below) than the target price

In-the-Money – This is a term used to describe an option’s ability to yield financial profits. When the option is In the Money it means that your prediction was correct and the option will pay the predetermined rate of return

Investment Amount – The total money invested in a CFDs, Forex and Option

Market Price – An underlying asset’s current value

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Non-farm Payrolls (NFP) – is one of the US most important economic indicators, which measures the employment rate in the country, except the farming industry. Such release will define a further direction of the American dollar. The data is published on the first Friday of every month.

One Touch Instrument – One Touch Option – CFDs type option with the proposed direction and target level that the price should reach at the time of its closing, at 17.00 GMT on Friday. The option can be closed before maturity if the target level is reached at 17.00 GMT any day before the expiry of the term.

Option Builder – This method allows the investor the most flexibility when it comes to risk management. The investor is able to choose from selected ratios that offer a return of wins and losses

Out-of-the-Money – This is a term used to describe an option’s ability to yield financial profits. When the option is Out of the Money it means that and the value of the asset will not pay any profit

Return – This refers to the amount of money a trader is given back if the option expires In the Money

Return on Investment – Another term for a Return

Strike Price – A term that refers to the value an asset needs to reach for the option to end In the Money

Target Price – Same as a strike price

Underlying Asset – The asset which an option is being written for

Underlying Asset Types – An asset which is owned and can be traded in one of these categories: Commodities, Currencies, Stock and Indices

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Binary Options

In finance, a binary option is a type of option where the payoff is either some fixed amount of some asset or nothing at all. The two main types of binary options are the cash-or-nothing binary option and the asset-or-nothing binary option. The cash-or-nothing binary option pays some fixed amount of cash if the option expires in-the-money while the asset-or-nothing pays the value of the underlying security. Thus, the options are binary in nature because there are only two possible outcomes. They are also called all-or-nothing options, digital options (more common in forex/interest rate markets), and Fixed Return Options (FROs) (on the American Stock Exchange).

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