Asset: Underlying instrument used to determine the value of a certain option. The main four classes of assets are currencies, commodities, indices and stocks. In financial terms, an asset is any tangible or intangible product capable of being owned and that can be used to produce additional economic value.

At The Money: An option is described as being “At The Money” when its strike price is the same as the current market price of the underlying asset.

Binary Options: An all – or – nothing type of option that pays a predefined amount if the price of the underlying asset meets the investor’s prediction at the time of expiry. Otherwise it will expire worthless and the investor will lose the whole invested amount.

Boundary Options: A type binary option where the trader must decide if price will be inside or outside a predefined trading range. Also known as IN/OUT or Range

Call Option: One of the two types of Binary Options. It reflects a trader’s belief that the value of an underlying asset will be higher at expiry time than it was when the option was purchased.

Chart: Graphic representation of a certain asset’s price movement.

Commodity: A generic term used for any marketable good produced to satisfy certain needs and can be traded through exchanges.

Crude Oil: A liquid fossil fuel extracted through drilling and known as one of the most traded commodities

Currency Pair: Two currencies valued against each other constitute a currency pair

Day trade: A trade that is opened and closed within the same day

Digital Option: A different term used for Binary Options

Downtrend: A general decline in the price of an asset, also characterized by lower lows and lower highs

Early Closure: The ability to close an open trade before the expiry time.

Expiration Date/Time: The time at which an option expires and the outcome is known.

Expiration Price: The price of the underlying asset when the option expires

Holder: A trader that has an open position in the market. If a person purchases a Call or Put option, he/she is the “holder” of that position until expiry or any form of early closure.

In the Money: The term describes an Option that is currently showing a profit. For a Call Option to be In The Money, the current price needs to be above the strike price. Vice versa is valid for a Put Option.

Index (stock market index): Method of calculating the average value (differently weighted) of the stock price of different companies contained in the index.

Instrument: Different term for “Asset”

No touch Binary Option: A type of Binary Option that brings a profit to the trader if price does not touch a certain predefined level during the option’s lifetime.

Option Period: Often referred to as an option’s lifetime, the period between the purchasing of the option and the expiry time.

Out Of The Money: The term describes an Option that is currently showing a loss. For a Call Option to be Out Of The Money, the current price needs to be below the strike price. Vice versa is valid for a Put Option.

Payout: The profit realized if a Binary Option expires In The Money

Pip: The smallest amount by which a Forex quote can move, generally the fourth decimal: 0.0001. Lately we see more and more brokers that offer five decimal quotes.

Put Option: One of the two types of Binary Options. It reflects a trader’s belief that the value of an underlying asset will be lower at expiry time than it was when the option was purchased.

Rollover: An instrument offered by some Binary Options brokers that allows the trader to extend the expiry time of an option

Share: A single unit of ownership in an organization, mutual fund or company. The total company capital is divided into shares.

Stock: Capital invested into a business. The stock of a company is divided into Shares.

Strike price: The price at which the holder of the option can purchase (call) or sell (put) the underlying asset.

Touch Binary Option: A type of Binary Option that brings a profit to the trader if price touches a certain predefined level just one time during the option’s lifetime.

Underlying asset: The instrument/product upon which the Binary Option’s calculation is based

UP/DOWN Binary Option: One of the most common types of Options, where the trader chooses UP if he/she thinks that price at expiry time will be higher than the opening price or DOWN if he/she thinks price will be lower at expiry time.

60 seconds Binary Options: They are UP/DOWN Binary Options with a 60 second expiration time.