Binary Options Terms
Trading with binary options is an attractive method to earn income. However, you will not be an effective trader if you will not be able to find one of the highly reliable brokers and if you will not be able to make yourself well-informed. For a start, educate yourself on various terms used in this industry:
Asset – binary option is founded on this. It includes commodities, stocks, indices or currency pairings.
Binary Option – An online investment that differs from Forex because its return is fixed, that trader already knows how much he’ll win before he even begins trading. It also allows you to choose the expiration time for your trade.
Broker – Brokerage companies that offer individuals – novices or experts – to perform binary options trading through their trading websites. Practice caution when signing up with one because scammers are everywhere and you may end up being a victim of one. Check reviews and lists of credible brokers online.
Current Rate – This refers to the present value of assets.
Range Option – Also called “Zone Option”, it refers to the specific restrictions set forth by brokerage companies for various zones.
Expiration Time – This speaks about the specific date and time when your stake for a particular asset expires.
High or Call Option – Trading with binary options allows you to predict the movement of the asset’s value. If you think it will increase after the expiration time, choose High or Call Option.
Low or Put Option – Place your trade on this if you believe that the price of the asset will go decrease.
In-the-Money – This term describes the scenario when you have accurately speculated the asset price movement, causing you to profit from binary option.
Out-of-the-Money – This is the opposite of ‘In-the-Money’: You have predicted the movement of the asset incorrectly.
Rate of Profit – This refers to the fraction of money that a trader receives as profit soon as a trade ends in-the-money.
Fundamental Analysis – This is important when your goal is to ensure profit in trading binary options. With fundamental analysis, you must learn how to assess the rise and fall of commodities, stocks or currency, basing on several factors like demographic, political and macroeconomic factors.
Technical Analysis – This is the method of using chart patterns to forecast how a specific asset moves. Is it going up or down? Unlike fundamental analysis, it does not make use of factors; it is founded primarily on the history of price data and volume.