Glossary

At-the-money

At-the-money means that the underlying asset is trading or has expired at the exact target price. Therefore, the investment is returned without any profit or loss.

Binary Option

A financial instrument that offers a fixed return rate known before the money is invested. There are only 2 possible outcomes – win or loss – with fixed payouts and losses.

“Call” (Above) Option

An option which allows a trader to get a prearranged profit if the expiry price of the underlying asset is higher than its strike price.

Expiry Price

The price at which the underlying asset closes. It is used to determine if the option is in-the-money or out-of-the-money.

Expiry Time

The exact time and date at which a binary option expires.

Investment Amount

The amount of capital invested per trade.

In-the-money

The term describes the result of a binary options trade that ends with profit. For a “Call” option, it happens when the expiry price of the underlying asset is higher than its strike price. For a “Put” option, it happens when the expiry price of the underlying asset is lower than its strike price.

Out-of-the-money

The term describes the result of a binary options trade that ends with loss. For a “Call” option, it happens when the expiry price of the underlying asset is lower than its strike price. For a “Put” option, it happens when the expiry price of the underlying asset is higher than its strike price.

“Put” (Below) Option

An option which allows a trader to get a prearranged profit if the expiry price of the underlying asset is lower than its strike price.

Return on Investment (ROI)

A performance measure used to evaluate the investment efficiency.

Strike Price

The price of the underlying asset at the moment of the option’s purchase.