Binary Options Glossary
OptionFair binary options trading have become hugely popular in the recent days. The reasons are many. It is simple and easy to understand; the rates of returns are very high; it requires small investment and it is the best way for a lay person to participate in international commerce. However, though you do not require any expert knowledge, a rudimentary idea is essential if you want to make informed choices while trading binary options. A binary options glossary will help you to gain these ideas.
Some terms from a typical binary options glossary
Here are some terms of great importance that you are likely to find in a binary options glossary:
- The basic term of course is binary option. This implies a trade where the amount of return is fixed from the outset. If you are correct, you already know how much profit you will make. Similarly, you also know the loss that you might incur if you turn out to be wrong.
- Another common term in a Binary Options Glossary is expiry. This implies closing the trade in a particular asset. Every option has its own expiry time which you should confirm at the time of investment.
- The market price is the current price offered for the asset in the market.
- Two terms of binary options glossary which are of great interest to traders are in the money and out of the money. The former implies that the trade has ended in a profitable manner while the latter imply that it has ended in a loss.
- The asset on which the broker offers an option is known as underlying asset.
- Another interesting term of binary options glossary is early closure. It is the ability of the investor to close an open position. As a result the option expires at once.
- If you are looking for slightly advanced ways to trade binary options, then you should know about boundary options. This term indicates a specified range. The trader will have to predict whether, at the time of expiry, the price of the asset will fall within or outside this range.
- The most common instrument used in binary options trading is the high/low instrument. Here, you will simply have to choose whether the price of the asset will be high or low than the limit specified by the broker at the time of expiry.
- Another term of binary options glossary that traders will love is refund. Many binary options brokers offer a return of 15% even on trades that expire out of money. This is known as refund.
Learn more as you trade to increase profitability
Though binary options trading are highly suitable for the newcomers, there are a number of advanced trading options as well. Study the binary options glossary regularly to improve your knowledge of binary options trading and earn even more profits in the future.