Binary Options Glossary
As the ease and simplicity of binary options trading become well known, it is attracting more traders. Though it is definitely easy and even a newcomer can quickly grasp the basic concepts, you need to be familiar with the key terms to carry on successful trading. For this, perusal of a Binary Options Glossary is a must before you actually invest your money and start to trade. You need to understand the implications of the technical terminology as well as the commonly used words to be able to operate freely in the world of binary option trading.
What you should know from Binary Options Glossary?
Here are some common terms of Binary Options Glossary which you should clearly know and understand before you can start trading:
- A pair of most common terms in the Binary Options Glossary is the Call option and the Put option. If you think the value of the asset will fall, it is put option while if you think it will rise it is a Call option.
- Another pair of terms of special importance to Binary Options Glossary is in the money and out of money. When you are making a profit, your trade is in the money. On the other hand, if you incur a loss, you are out of money.
- Another term is American style option. It refers to an option which you have to exercise at any point of time before it reaches expiry.
- Two terms often used to describe the state of the market are bearish and bullish. The former refer to a situation where the price of an asset is expected to decline. On the other hand, the latter refer to a situation where the price of an asset is expected to rise.
- Closing a trade is vital for determining profit or loss. This refers to the process whereby an existing trade is ended.
- You must have heard about day trade. This refers to trade in an asset which is opened and closed on the same day.
- The most important term in a Binary Options Glossary is of course binary option, also known as digital options. It describes a trade where the trader gets to pick one out of two predictions. If he is correct, they earn a fixed amount while if they are incorrect, their loss is known beforehand.
- When all the call options or all the put options underlying a trade are described together, it is called a class of options.
Read Binary Options Glossary before trading
As you learn more and more about binary options trading, it is likely that you will come across more terms. That is why; you should always have an access to a good Binary Options Glossary so that you can understand every situation and be able to make a profitable trade. Often, this Binary Options Glossary is provided by the broker that you choose if they have a high standard of customer support and user friendliness.