Basic Terminology about Binary Options : Terms You Must to Know

Today we have more people interested in making money online than looking information about Formula 1 or luxury hotels. That’s why because you can make a lot of money if you have sufficient information to make decisions and understand how financial markets move. That’s why financial instruments like binary options are so important and you must understand every single aspect related to it so that you can have the opportunity of increasing your possibilities to win. In order you can introduce in the binary options world, I would like to share with you some basic terminology about binary options: Terms you must to know if you want to become a sucessful binary options trader.

Asset ( or Underlying ): The resource used in a binary contract: Commodity, stock , index or currency pair.

Broker: Brokers are individuals or companies that allows users, traders or investors to trade binary options in the financial markets. Even though a broker could be a professional or experts in stock market and Binary options trading, we can also call brokers to websites and platforms who provide you the technology and support to trade online.

Binary Option: Way of investing online for a fixed return ( payout or losses ) at a fixed expiration time.

Current Rate: The current price of an underlying asset.

Expiration time: Time and date when an option expires.

Range Option: Also called “zone option” this is a limit that companies often specify describing if there is any exclusion about some offers or prices don’t apply for a specific zone.

In The Money: It means that could exist a subjacent amount of money that could benefit the investor once binary option expire.

High or Call Option: Regularly, this is the most conventional or used type of binary option. The high or call option consists in speculating with the increasing of an asset in contrast with the time of purchase.

Low or Put Option: This is a very similar way of trading if you compare it with call option. Nevertheless, in this case you speculate decreasing an asset –the contrary.

Subjacent Asset: When we talk about subjacent asset we are describing the indexed price of a binary option.

Out of The Money: The term out of the money is used when a subjacent price in a binary option expire is not going to be beneficial for the investor.

Rate of Profit: We refer to “rate of profit” when we talk about the percentage of money that you will obtain as return for each single asset you choose to trade in binary option.

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