Binary Options Glossary

Binary Options Glossary Binary Options Glossary | Binary Options Review

Binary Options

A binary option is when a buyer enters into a contract to purchase an underlying asset at a fixed price at a pre-determined time in the future.

Binary Options Trading

Binary Options Trading is a type of trading that allows investors to partake in stock, commodity and currency pairs trading, just with less risk and smaller premiums.

Index Options

These types of binary options are comprised of not just a single stock but of an index of many stocks, giving the trader diversification and opportunities to trade in particular sections of the market on a larger scale.

Index Options Trading

This type of binary options trading deals with index options that are not just single stock options but indexes comprising of many stocks.

Forex

The Forex, or the Foreign Exchange Market is an international market whereby foreign currencies are exchanged for one another. One of the largest financial markets in the world, it operates on a 24-hour basis through a non physical global network of banks, corporations and also individual currency traders.

Forex Options

In binary options trading, when trading in Forex options you are predicting the movement of set currency pairs like EUR/GBP (the euro against the pound) or AUD/USD (the Australian dollar against the US dollar). These currencies make up one of the largest financial markets in the world, otherwise known as the Forex, or the Foreign Exchange Market where traders can deal 24-hours a day, 5 days a week. Trading on how well a particular currency is doing alongside another, traders can make informed predictions on currency pairs and with the added comfort of short expiration times that is common when trading in binary options.

Forex Options Trading

When dealing in forex options trading you are predicting the movement of currencies against each other, comprising as one of the largest profit gaining financial markets in the world, the Forex (Foreign Exchange Market).

Commodities

A commodity is a physical raw substance that is sold or bought by investors across the financial market.

Commodity Options

When investing in commodity options you entering into contracts that give you right, but not the obligation to the movement of a commodity stock in the market. This means that, instead of buying stocks outright and falling victim to the either profitable or non-profitable price outcome of it, you are simply predicting the movement of the commodity and whether it will rise or fall.

Commodity Options Trading

In binary options trading, trading in commodity options allows investors to trade in some of the most well known commodities in the market, such as gold, oil, silver and copper. Thought by many as an easy market to trade in, there being only forty commodities to trade in, and easy to follow, with movements often relating to world affairs, it is an attractive option.

Indices

This is the plural term for a singular index. In the stock market, indices are groups of stocks put together in particular ways, representing a portfolio of stocks or commodities.

Currencies

Currencies are traded in pairs, trading one currency against the other. Currencies rise and fall according to the markets demand for it, rising if the market’s demand for it is greater than the available supply and falling if the demand is lower than it. All financial trading of currency pairs takes place on the Forex, or the Foreign Market Exchange.

Stocks

A stock is a small share or piece of ownership of a chosen business or company that gives the owner claim to a share of their earnings.

Stock Options

When you purchase a stock option you are entering into a contract that deems you the right, but not the obligation to its shares. In other words, you are not physically purchasing a stock outright and relying on the stock doing well, you are simply predicting the direction that the stock will move and betting on this outcome.

Stock Options Trading

In binary options trading, trading in stocks is always a popular choice for investors. With big, well known names featuring in the market, it is easy for investors to keep up-to-date with breaking news and sudden changes and fluctuations to their chosen stock.

Binary Options Trading Platform

There are many different types of Binary Options trading platforms. All web-based, they allow investors to trade binary options on selections of stocks, currency pairs, indices and commodities. Each trading platform competitor offers unique trading benefits to the investor as they each contend to be the most worthwhile trading utility for customers.

Binary Options Brokers

Binary Options Brokers or binary options trading platforms are online internet based sites whereby investors can trade in binary options from the comfort of their very own computer screen. Each broker is individual to the next, each offering investors a plan with varied attributes.

Digital Options

A digital option or a binary option is an investing route in which the pay-out of the stock is pre-determined in the contract from the onset of the purchase. Also known as the “all or nothing route”, when an investor purchases a digital option there are only ever 2 possible outcomes; 1. An in-the-money result will earn the investor the fixed return plus their original premium back or 2. An out-of-the-money result will deprive them only of their original premium, and in some cases even compensate them with a 15% return.

Fixed Return Options

In binary options trading, fixed return options offer many investors a safer way to invest in the stock market than conventional stock investing. The benefit to the investor of making a purchase with a fixed return is the security of knowing exactly what they would earn if the option finished in-the-money.

Call Option

In binary options trading, a call option is what an investor purchases when they believe that the chosen stock will rise above the current price.

Put Option

When trading in binary options, a Put option is purchased by the investor when they believe that their chosen stock will expire below the original purchase price, even by only 0.0001.

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