Binary Options Glossary

binary options glossaryWe compiled a list of ‘must know’ terms in the online binary options trading world.

Don’t worry, it may seem like a lot at first but we assure you, IT WILL become easier and easier to understand with a little time and practice.

 

  • At the money

A financial term meaning the market price of the asset is trading precisely at its target price.

  • Binary Options

Please see here (it’s really easy and pretty short)

  • Boundary Instrument

This instrument allows you to create a range of prices for a given asset and lets you decide whether the asset will be located in or outside of that range by the time the option expires (for instance, your boundaries for gold are 5 and 7, upon expiring the asset’s price should be between 5 and 7)

  • Early Closure

This allows you to immediately expire an option with an open position.

  • Expiry level

The expiry level of the asset at the time of expiry is based on a feed provided by a data provider.
We encourage you to contact your binary options customer service for the expiry level calculation explanation.

  • Expiry time

Time and date of the option’s expiry (option lifetime)

  • High Option

High option offers typically an 85% return if the asset expires at a higher level than the option target price.

  • High/Low Instrument

This instrument is at the basis of trading options, it allows you to decide if an asset will be higher or lower the target price when option reached its expiry time.

  • Inbound Option

Remember ‘boundary instrument’? Well, an option using this instrument typically offers an 85% return if the asset expires ‘Inbound’= within the range formed by the upper and lower target values.

  • Investment Amount

How much money you are willing to invest.

  • In the Money

If you are in the money then you are winning thus happy and making money.

  • Low Option

Low option offers typically an 85% return if the asset expires at a lower level than the option target price.

  • Market Price

This is the current value of the asset as shown by the binary trading room.

  • No Touch Option

An option is using a ‘one touch’ instrument will offer an 85% return if the asset does not reach the target price during the lifetime of the option.
Please Note: if a ‘No Touch’ option does reach the target price at any time during the lifetime of the option then the option automatically ends and expires ‘out of the Money’.

  • One Touch Instrument

This is a very cool instrument where you can determine if an asset’s price will reach (i.e. touch) or not reach (i.e. no touch) the target price during the option’s lifetime. (It doesn’t matter when, as long as it’s in the options lifetime)

  • Out of the Money

If you are out of the money then you are losing thus not happy and not making money.

  • Outbound Option

Remember ‘boundary instrument’? Well, an option using this instrument typically offers an 85% return if the asset expires ‘outbound’= outside the range formed by the upper and lower target values.

  • Refund

The amount refunded to you after expiry of an option in the event that it expires ‘Out of the Money’.

  • Return

The amount returned to you after expiry of an option ‘in the Money’. For example in a case of an investment of $500 the return will be $925 if the return is at 85%.

  • Target Price

This is the price that your binary trading room is willing to sell you the option. (may be sometime called a strike price or purchase price).

  • Touch Option

An option is using a ‘one touch’ instrument will offer an 85% return if the asset does reach the target price during the lifetime of the option.
Please Note: if a ‘Touch’ option does reach the target price at any time during the lifetime of the option then the option automatically ends and expires ‘in the Money’.

  • Underlying Asset

The assets on which your online trader write an option. (you can see a list of assets in every binary options trader website or in our review sections)

Read our binary brokers comparison chart and pick your preferred binary options broker according to our top 11 criteria.

Feel free to comment and tell us if you liked this list, any entry we need to fix, add or change, we would love to hear your voice.

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