Get your head around the jargon for binary options and trade with confidence.
There is a great deal of complex ‘insider’ terminology in financial trading – familiarising yourself with the language of financials will help you play the markets like a professional.
Terms & jargon
The following list of terms will help you understand financial betting:
|Asset:||the instrument used to strike a contract; e.g. stock, currency pair, or index.|
|At the money:||a neutral outcome of a trade where the value of the option at expiry is equal to the strike price. In this case, your investment will be refunded.|
|Boundary or range instrument/platform:||a facility allows the customer to decide whether the value of the asset will be inside or outside a specified range at time of expiry.|
|Call:||trading on an asset with the presumption that the value of the asset will be higher than the strike price at expiry.|
|Commodities:||raw materials such as energy, food, or metals.|
|Current price:||the price of something reported in ‘real time’.|
|Digital (binary) option:||an option that offers a fixed return or none at all.|
|Early closure:||closing an open position so that the option will immediately expire.|
|Exotic options:||an option that traded on exclusive markets for years that has now become available to the public as binary options.|
|Expiry level:||the value of an underlying asset at the time of expiry.|
|High:||an option in which the investor presumes that the underlying asset will expire at a price greater than its target.|
|High/low instrument/platform:||an option or trade that gives the investor a fixed pay-out if an asset expires at a price that is higher or lower than it was at the start, provided that the selected expired ‘in the money'.|
|Index/indices:||an index that represents a basket of stocks.|
|Investment amount:||the amount invested in an option, also referred to as ‘the stake’ or ‘strike’.|
|In the money:||an asset that, during a specific option/trade period, trades in the position presupposed by an investor.|
|Low:||an option in which the investor presumes that the underlying asset will expire at a price lower than the strike price.|
|Market price:||a price that represents the current value of an underlying asset based on the opinion of collective markets.|
|No touch:||an option that does not reach or surpass its target.|
|Out of the money:||an asset that trades in a position that has not been chosen by the investor.|
|Put:||trading an asset with the presumption that its value at expiry will be lower than it was at purchase.|
|Return:||the amount paid to the investor if an option expires ‘in the money’.|
|Stock:||shares of a specific company.|
|Time of expiration (expiry/maturity):||the time and date when an option/trade expires.|
|Touch instrument:||an option that gives a predetermined fixed pay-out if the trader selects one of two possible outcomes:
Touch: an option touches or surpasses a predetermined level once during a specific option/trade cycle.
No touch: the asset does not reach or surpass a predetermined level during a specific option/trade cycle.
|Touch:||an option/trade whereby the asset reaches or surpasses a set level.|
|Underlying asset types:||traded commodities. For example:
Stocks: (e.g., Google, British Airways)
Commodities: (e.g., Gold, Brent Crude)
Indices: (e.g., NASDAQ, FTSE 100)
Currencies: (e.g., USD, EUR)
The right financial clients
You know the lingo – now it’s time to rake some chips. Get started at some of our best financials clients.