60 Seconds Option

This type of online investing is also known as CBOE betting which stands for – Chicago Board Options Exchange. This is a form of financial transaction which is related to investors who are going to trade against each other rather than against a broker. The winner gets his opponent’s invested amount minus a commission.

A

American-Style Option

This is generally a more liberal mean by which to conduct binary options trading. Basically, the main difference from the European-Style Option is the exact time at which the asset’ price will rise or fall. American-Style Options does not require a pre-determined or fixed time. The movement can happen at any given moment as long as the line has not hit the expiration date.

Arbitrage

A type of strategy that involves the buying and selling of assets with similar profiles and profiting from market discrepancies. Applying an arbitrage strategy is very hard in the binary options industry. It is more suitable and used in traditional stock trading, where you buy and sell similar stocks on different markets.

Are Binary Options Legit?

Dealing with binary options online trading is definitely legit business. However, it hides high risk as there are many scams and bogus online trading platforms. They claim to be reliable and profitable, but the truth is just the opposite. Therefore, only experienced traders should invest in this trading field. The others should learn the basics first.

Ask Price

The ask price is the merest possible level a particular asset’s seller is willing to give it for. So-called over-the-counter stocks, part of which are CDOs & CMOs consider the ask price as the best quoted price at which a stock could be sold or purchased for.

Asset

An economic resource, available for trading. In traditional investments, assets are to be bought and sold, they have an owner and yield a form of return. In binary options, there is no transfer of ownership when investing because you invest upon your guess of the change in price. Assets are grouped in four main categories – indices, currency pairs, commodities (like oil and gold) and stocks. Very few binary brokers offer bonds as part of their asset portfolio.

At the Money (ATM)

One of the three possible outcomes when trading binary options. At The Money situation emerges when the price at expiry of an option is exactly the same as the one at the moment of its purchase. With At The Money situations there is neither profit nor a loss.

B

Barrier Option

Basically, this is an option type that has a payout depending on whether the specific asset has reached or surpassed particular value level. There are two types of outcomes for this options type – knock-out (losing) or knock-in (winning).

Bear Spread

The name of the bear spread is actually derived from the fact that it resembles the real-life animal in trading charts. In general, it is a vertical spread that commonly appears when trading different options. It is extensively used in binary options and in any financial operation in which call and put pairs are involved. The person who is trading the said options has to be bearish on the underlying stability of the asset in question.

Best Option

Generally speaking, option means that one has the power to choose the best opportunity that is available for him. In the field of trading binary options best option is the choice that will bring the most profitable outcome for the trader. In other words, when placing a trade for example, people should watch for the payout level, risk level, expiracy etc. in order to make sure that their investment will be amplified or at least increased.

Bid Price

A bid price is the price a that a trader intends to pay for a specific security. This is the first part of the bid. The other is the size of the bid. It defines the amoun of shares that the trader want to obtain at that price. There is an opposite vesion of the bif – the ask price. At this price owners want to sell their shares. Therefore, the both prices always go together as the price of the bid is lower than the ask price.

Binary Account

Usually this term means that a trader has registered an account in some specific binary trading platform. Depending on the type of the chosen system, the accounts are different and can vary especially if investors have registered directly with a brokerage.

Binary Investments

The term is related to the specific amount of funds traders place in order to complete an initial deposit process. This action is required everytime you decide to register with a specific binary trading system.

Binary Option Payoff

This is the amount of profits traders earn if the trade turns out to be profitable. On the contrary, if the trade is losing, there is no profit for the trader. Depending on the specific binary trading platform, the payoff percentage varies.

Binary Options App

This means that a system that offers online trading binary options maintains an app which is downloadable to mobile devices. It is a convenient solution for investors who practice trading on the go.

Binary Options Companies

At this point, there are over 400 online trading platforms that operate on the binary options market. The situation is completely different from the one in 2008 when binary options trading started. Back then the total number of available trading platforms was about 10. However, the appearance of many online trading systems is good since it has created high competition. This is beneficial to traders after all.

Binary Options Exchange

This type of online investing is also known as CBOE betting which stands for – Chicago Board Options Exchange. This is a form of financial transaction which is related to investors who are going to trade against each other rather than against a broker. The winner gets his opponent’s invested amount minus a commission.

Binary Options Hedging

Basically, hedging is a way to reduce the risk when conducting your trades. It is used in order to assure some insurance to the investor and protect his funds from a negative outcome of his trades. However, this can’t stop the negative movement of the market’s price of the asset but it can reduce the damage. When investors apply such hedging methods in their trading process they accumulate profits that are not very significant but they are regular.

Binary Options Mobile Trading

Binary options mobile trading is one of the latest innovations in the industry. The rise and ever-increasing popularity of the so-called smart technology made creators of software and platforms consider that there is a large number of users who prefer to invest on the go. This is why, so many mobile apps for trading binary options have come out in recent years and almost every robot and brokerage provide one.

Binary Options Platform Provider

Binary options platform providers are manufacturers and developers of software who provide brokers with an already existing product which they can successfully utilize and implement. This way the creators of online brokerages can concentrate on offering better services and bonuses to users instead of on the design.

Binary Options Pricing

Binary options pricing refers to the process of a particular asset’s price going up or down right before the expiry time is met. It is basically the exact price at which a placed trade finishes and is responsible for whether the user is going to have a winning or losing investment.

Binary Options Regulation

When a binary options trading robot, signals providing system or investment broker must operate under strict regulations in order to be considered legit. This means that it needs to be monitored and approved by a particular authoritative body such as CySEC or MiFID. A regulation is one of the rules every platform must abide. Such can be: transfer of the earned funds, general customer satisfaction, provision of a support service and many others.

Binary Options Signals

Binary options signals are aimed at online users who prefer to manually execute trades instead of relying on an automated robot. Their purpose is to ease the investment process for people. They are provided by special systems, specifically designated and experienced traders, a company or a third party. What they basically do is to monitor, scan and analyze the market, the news and behavior of people for particular indicators. When they identify a profitable opportunity – they send signals to online users in the form of a bleeping sound, after which the latter have to choose whether to follow them or not.

Binary Options Trading Brokers

Binary options trading brokers are basically online brokerages where users can open an account according to their very own personal preferences. The latter differ in the bonuses they provide, as well as the monetary amount one must deposit in order to get started. Such platforms are generally considered more legit than investment robots or signal providers because it is more common for them to be regulated, monitored and operating under the supervision of regulatory bodies and authorities.

Binary Trading Software

Binary trading software is basically an online system that is capable of predicting the possible movements of a particular asset’s price. This is carried out through the use of sophisticated computer algorithms who constantly monitor the market and the news and are capable of accurately analyzing their impact on the financial world.

Boundary

Trading Boundary Options is generally recommended and suitable for seasoned investors who already know the binary basics and are ready to move on with more sophisticated methods and strategies. The main difference between Boundary Options and the regular ones is that users can choose an extended time frame, i.e. one month, and price, i.e. $7 – $9, when trading the first, while the latter requires a set prediction.

C

Call Option

In general, a call option is the right of a particular user is entitled to the right to buy a specific amount of a security at a predetermined and set price within a limited time frame. It is entirely up to him whether he will do so or not. If one has the option in question and wishes to sell it, then he has to do it at a specified price. If the operation is successful, the trader is granted a monetary premium for undertaking such a risk.

Closing Price

The Closing Price is the exact monetary value of a particular asset at the exact time when the market closes. It is also known as the Final Price and does not stay put from one day to the next, but is subject to change, unexpected swifts and rapid movements.

Commodities

A commodity stands fort a basic good which is used in commerce. I t can be easily interchanged with other commodities of the same type. They are most often used as inputs in the production of other goods or services. In the field of binary options trading the commodities are actually among the four main assets’ types that traders can choose from when deciding what to trade.

Currency Options

A currency option is the act of buying or selling a particular currency pair before or exactly at a preliminary determined expiry date and time. It is the best known way for upscale investors to secure themselves against unexpected market movements.

D

Day Trading Options

The two most important things which traders that prefer to use day trading options should have in mind are: time value and the high liquidity of the bid-ask spreads of the market. Day trading is basically investments in securities, no matter if the investor is buying or selling them, that occur within a specified day.

Deposit

This is the needed amount of funds each trader has to invest in their account in order to be able to start trading. Depending on the particular platform, the required amount of initial deposit is different. However, it is not too large, so everyone could commence a successful trading process on the binary options market.

Derivatives Trading

Trading investment instruments (derivatives) with a value that is dependent on the value of an underlying financial asset. Popular derivatives are futures, options and CFDs.

E

Equity Options

In the field of online binary options trading equity options are actually the most popular kind of equity derivative. They give you thе option to buy (call) or sell (put) a quantity of stock (1 contract = 100 stock shares), at a strike price, within a preliminary chosen time period.

Exit Strategy

There are many different types of exit strategies. What the term basically refers to is the type of strategy an investor, a representative of a financial company or any other person dealing with online or real-life trading would undertake and apply when he wants to reimburse his positions or dispose of an unprofitable asset or company.

Expiry Level

The expiry level is the exact and actual price of a particular asset at the particular moment it reaches the end point. This is a very sophisticated process as some particular types are being sold at several different exchanges simultaneously and the monetary amount goes up and down and changes constantly throughout the trading day.

F

Fibonacci Retracements

Fibonacci Retracements are complex means by which reversal levels are determined and established. The name is derived from the fact that most of them are found the infamous golden sequence. The most popular Fibonacci Retracements are: 38.2% and 61.8%.

Fixed Amount

Fixed Amount is a term used entirely for describing a concrete sum, not necessarily a pre-set one, which must be deposited in order for the user to gain access or rights to something.

Fixed Return

The term refers to a security with a guaranteed return or profit delivered at a set time period. This could refer to earnings in the form of coupons, bank transfers, a pre-determined stock or an interest rate which builds over time. Contracting an agreement which includes Fixed Returns means that the sides are legally required to grant it.

Fundamental Analysis

This is a type of analysis which tries to identify the exact reasons for market shifts and movements as well as the cause of economic problems. It pays special attention to different companies and industry groups which may inflict pressure or turn the tables to their own advantage.

Futures Trading

Futures trading involves two distinct groups of people: hedgers, who want to avoid the risk associated with the sudden change in a particular asset’s price, and speculators who generate profits by guessing the direction of the option’s price by predicting its sudden move, thus opening a derivative contract.

H

Hedging Binary Options

A method of reducing the negative impact of an option that is about to expire Out The Money. The negative effect might even be completely eliminated. Hedging ensures a steady profit, though smaller in size in comparison to an option you did not hedge.

High Option

An option type term used to describe one of two results in the High-Low binary option type. A High Option is traded when you predict that the value of an asset in some future moment will be higher than the price at the moment in which you place the trade.

Holdings

The content of an investment portfolio held by a person or a legal entity. It comprises all the assets you hold ownership over. In terms of binary options, it refers to the types of assets you trade.

I

In The Money Option

Known as ITM, this indicates that you have won a trade or that for now it is moving in such a direction that suggest you are going to win the trade.

Index Options

A financial derivative instrument. It implies the buying or selling an underlying asset which is an index, for example Standard and Poor’s, and not a stock or another type of asset.

Indicators

The term refers to different data, stats and figures by which experts analyze the current market condition and try to predict its future shifts and movements. Technical indicators are utilized mainly for the forecast of assets’ prices. Economic ones are utilized to determine company stock rates.

Indices

This is a measurement of the value of a section of the stock market and contains lower risk than trading with singular stocks as the section is a portfolio of similar stocks.

Initial Margin Requirement

This financial term refers to the percentage of equity required when a trader decides to open a position.

Investing in Options

This is the process which defines how much each investor is going to place in their trading account in order to start placing deals. The more funds you invest, the more profits you are likely to generate.

Investment Amount

This is the amount you invest per each trade you execute. It is a portion of your trading balance. The investment amount can vary greatly – from just $1 to more than $1,000. Some options offer you to choose between fixed investment amounts, starting from $25.

Investment Strategy

This process is entirely up to traders as they are solely responsible for their transactions. However, there are many supporting tools available, and they are designed to help newcomers with less or no trading experience.

L

Lagging Indicators

Indicators are used in order to give professional and amateur traders a better perspective on where the market is going and predict the possible changes in assets’ price. There are several different types. Lagging indicators are the ones that have a postponed and slowed reaction to particular shifts in the economy.

Legitimate Binary Options Brokers

Every binary options platform has to be approved by an organization or user testimonials in order to certify that it is legit. Robots and systems are approved by people who have tested them. Online brokerages have to operate under the supervision of CySEC, MiFID or another officially authorized regulatory body so that traders can be sure that they are legitimated. This will be visible in the form of an approval stamp on their official websites.

Liquidity

Represents the availability of liquid assets in a company’s balance or on a given market. Liquidity describes the quality of assets to quickly turn into cash (i.e. if it can be sold immediately). The quicker this can happen, the more liquid an asset is.

M

Margin Call

In terms of binary options online trading this term refers to the broker’s demand on a trader using margin to deposit additional funds or securities so that the margin account is brought up to the minimum maintenance margin.

Market Price

The market price is the value of the underlying asset at the current moment. Comparing it to the initial value will give the answer whether you have won the trade.

Mobile Binary Options

The possibility for online investors to trade on the go by using a binary options trading system on different devices such as smart phones, tablets and laptops. In order to make their products suit to such clients, the developers of different online trading platforms make them applicable for Android, iOS and Mac.

N

Net Profit

The Net Profit of a company is the results of subtracting its total expenses from its total revenue. It represents what the company has made or lost in a given period, which is usually a fiscal year.

No Touch

No Touch, also Known as Double No-Touch, is one of the so-called exotic options in which the user has to guess the asset’s price without crossing one of the two pre-set barriers. In order to trade such an options, traders have to have a higher account type and give a premium to their respective binary options broker. They are then entitled to the right to choose the position of the barrier, the return on investment and the expiration time.

O

One Touch Binary Options

This is one type of binary options trading that is considered winning for the trader only if the price of the underlying asset reaches or surpasses a predetermined barrier for once. In addition, traders can set the place of the barrier, the expiry period and the payout.

One Touch Instrument

These are financial instruments which allow for the successful placement and execution of One-Touch options. The latter can be any type of investment in which the particular asset’s price lands exactly on or transcends the pre-set barrier. In these types of financial operations, the user has the right to decide what the payout rate would be, the range of the time frame as well as the positioning of the said barrier.

Option Calculator

An Option Calculator is any software or platform that is capable of issuing accurate market predictions and suggestions on what type of parameters users should set when engaging in options trading. The latter could include payout rates, time frames, interest rate, asset price volatility and others. The Option Calculators makes these recommendations and propositions based on previous, but still current financial data.

Option Pricing

The term option pricing describes the actual value of a particular asset without view to which category it belongs. Several different factors have to be take into account before the estimated monetary price can be determined. These include: expiration time or end date of the option, asset volatility, intrinsic value and dividents. There are a couple of pricing models which can be implemented in order to calculate the option price more accurately, of hich the Black-Scholes is the most widely used and prominent.

Option Trading Software

An option trading software is any robot or system which has the capacity to provide its clients with the opportunity to engage in financial operations. Assets can be from any of the four main categories: indices, stocks, commodities and currency pairs. The software usually works in close partnership with binary options brokers and features an analytical algorithm which constantly scans the market for profitable investment opportunities. After it calculates the probable outcome, it alerts users by sending them a digital signals which is often vocalized with a bleeping sound.

Options Trading Account

This is the trading account that users open with a particular binary options broker or system. The different types provide various features and have distinct minimum initial deposit amounts. The higher one is willing to place, the more the payout rate increases.

Options Trading Hours

Most binary options systems and brokers mimic and follow the exact trading hours of stock exchanges around the world. This means that they actually work around the clock because of the different time zones in which the five main ones operate. The latter are located in: New York, London, Tokyo, Shanghai and Hong Kong.

P

Payout Rate

The percentage of the per-trade invested amount that will be gained as profit on a winning trade, once it expires. Standard payout rates go between 60% and 90% for the different binary brokers.

Payout Time

Basically this phrase stands for the expected financial return from a particular deal that is placed for a preliminary set expiration period.

Platform

In the sphere of binary options online trading platform stands for the different available trading solutions that offer services to the public. When it comes to binary brokers, platform means the specific trading platform which is utilized by the broker. For example there are many different brokers using the same trading platform.

Put Option

A put option is any kind of financial operation in which its holder has the right to sell it to a second party. The latter is entitled to pick and decide on an exact pre-set time frame or end date, a fixed payout rate and strike price.

R

Range Option

This type of option implies that the trader will have to speculate whether the asset price at the moment of expiration will be within predetermined lower and upper boundaries.

Real Time

This phrase is used in the field of binary options trading to mark accurate and live information flow. It may be in the shape of trading signals, charts or other traders’ transactions.

Refund

This term means actually a part of the full amount from traders’ investment. The refund is given to them, when their particular trade ends up winning. Most of the brokers’ websites refund the traders with a part of their investment on average around 15%. However, this percentage may vary in different broker services.

Resistance Level

This is the point which the price cannot overleap. When you reach such a resistance level, it is suggested that you place a short term PUT trade.

Return on Investment (ROI)

The RoI, or return on investment, is the estimated amount of payouts which users can expect when opening an account with a given binary options system or broker. Different account types offer different ROIs, depending on how much is the initial deposit amount. Usually, the bigger sum one is willing to place – the higher payout amount.

Rollover Feature

A feature that can be found on broker platforms. It allows the investor to extend the expiration time of the placed trade.

S

Spread

This term defines the difference between the ask and the bid price of a stock, or the amount that a trader wants to buy or sell.

Stock Exchange

The place where traders and brokers meet to sell or buy the so-called securities – stocks, bonds and other types.

Stock Options

A stock option would go on to describe the contract between two parties in which one has bought the right, but is not actually obliged to carry it out, to sell or purchase 100 stock shares at a pre-set price to the other. The whole process must be completed within a pre-determined time frame.

Stock Trading

Stock trading involves the buying or selling of a particular equity or security. This investment type is partially domiciled as big companies are usually headquartered in a particular country, which would mean that its stocks are traded exclusively there, but this does not mean that they are not listed in other stock exchanges around the world.

Stop Loss Order

A stop-loss-order is a particular trading type in which a stock is purchased or sold at the exact moment when its price has reached a specific rate. When this occurs the stocks order becomes the market order.

Strike Level

The term strike level is a synonym to strike price. It represents the monetary value at which an options contract may be carried out.

T

Technical Analysis

A methodology used for forecasting the future direction of asset prices by submitting to analysis historical data like past price and traded volume.

Trading Minimum

A trading minimum is the lowest monetary amount that is required out of the user in order to begin investing. It could refer to the initial deposit that most systems and brokers ask in exchange for opening an account with them or to the smallest possible sum one can place when proceeding to place a trade.

Target Price

This is the price level traders want each asset to achieve during the deal they have placed. This way the trade is considered winning or In the Money otherwise the deal is going to be losing.

Trend

Basically, a financial trend would represent the constant movement of an asset’s price in a particular direction without view if it is going up or down. A rising trend would mean that a market sector is going through a positive period of increase, while the opposite means that the particular asset is losing its value.

U

Underlying Asset

This is the specific asset traders have chosen to trade with. This means that they place trade related to the current price of this asset on the market. If traders are right about the movement, they win, if not, they lose.

V

Virtual Options Trading

This is the other way to say binary options online trading. Actually, traders use it to say that they are able to place real trades on the market from the comfo0rt of their home.

Volume

The average daily investment volume is basically the combined amount of assets that have been traded in a particular market sector or as a whole for 24 hours.

W

Weekly Options

In 2005 CBOE began a pilot program with “weeklys” options. They are the same as monthly options except they only exist for eight days. They are introduced each Thursday and they expire eight days later on Friday.

Withdrawal Process

Profits withdrawal is the process of receiving of the accumulated earnings for a certain period of time. Most binary options platforms have an expedited withdrawal procedure in case the trader is in an emergency. Otherwise, it does not take any longer than 3 to 5 business days depending on where the user lives. There are several different withdrawal methods, which include Wire Transfers, bank transactions and other.

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