The underlying instrument used to determine a contract; generally a commodity, stock, currency pair, or index.
A term used to describe when a trade expires at the same price as the strike price prediction. This results in the trader merely being refunded their initial stake placed on the option.
One of two option choices, in which the investor realizes a profit if the asset has a higher value at expiry than it did at purchase.
The price in near real time as reported. The term current price is often used to contrast real-time reporting from most free price information, which is often delayed by fifteen minutes or more.
A Japanese candlestick is used as a form of charting to show price movements of assets within the financial markets. Using a candlestick we can derive the high and low points of a price over a specific period time, including the open and closing price of an asset over a specific time period. Generally in the markets a negative price movement is indicated by a red colored candle and a positive movement is indicated by a green colored candle.
An alternate name for binary options; a type of option with a fixed payout and fixed loss.
The current price of the asset when the contract on the asset expires. In above-below binary trading, whether the option finished in-the-money or out-of-the-money is based on the expiry price of the asset.
The date and time when the option expires.
Binary Options are a simplified version of exotic options, which were traded on exclusive markets by brokers for years before they were available to the public as binary options.
A class of indirect securities, made up of a contract to either buy or sell some sort of commodity at a time in the future. A strict futures contract requires that the holder buy or sell the commodity, while a futures option gives them the choice to do so.
One of the two major schools of analysis, used to examine macroeconomic data such as national economic health, central bank decisions, political events, or geologic events. At its core fundamental analysis believes that assets may experience fast market movements temporarily, but eventually will reach a stable market price, and by examining macroeconomic events one can deduce what that eventual price may be.
The amount of money invested in either a Put or Call option; the stake.
A term to describe an investor finishing in a position where they realize a profit. If a Call option was purchased, it is in-the-money if the expiry price is higher than the current price was at the time of purchase; if a Put option was purchased, it is in-the-money if the expiry price is lower than the current price was at the time of purchase.
Products which are sold directly between two parties; distinguished from exchange trading, which occurs via exchanges and brokers set up for the purpose of managing these transactions. Binary options are available in a limited number of exchanges, but are primarily sold as over-the-counter products online.
A term used to describe an investor finishing in a position where they experience a loss. In binary options this generally results in a loss of 80% to 100% of the initial investment. If a Call option was purchased, it is out-of-the-money if the expiry price is lower than the current price was at the time of purchase; if a Put option was purchased, it is out-of-the-money if the expiry price is higher than the current price was at the time of purchase.
The profit realized when a contract expires in-the-money. In binary options the payout is generally between 75% and 85%.
One of two option choices, in which the investor realizes a profit if the asset has a lower value at expiry than it did at purchase.
May be used in a number of contexts. Generally speaking, the price at which the contract option for an asset can be exercised. In the case of binary options, most often refers to the price-at-sale of the asset, which is also the price used to determine whether a contract expires in-the-money or out-of-the-money in an above-below option. In the case of a touch option, refers to the value the asset must reach for the contract to be in-the-money.
Time of Expiration
The time and date an option contract expires; expiry time.
One of the two major schools of analysis, used to examine historical data to predict future trends in an asset price. At its core technical analysis believes that all aspects of an asset price are built into the market price, and that trends can be deduced to determine the direction an asset will take.