Binary Options Brokers – Glossary

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  • BINARIUM
    BINARIUM

    Best Binary Options Broker 2020!
    Ideal for beginners!
    Free Demo Account + Free Trading Education!
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  • BINOMO
    BINOMO

    2nd place in the ranking!

Binary Options Glossary

Trading with binary options, as you probably know, requires you to be a real pro in all of the terms and basic rules of this activity. For this purpose it is strongly recommended that you become aware of those words with important meaning which you will encounter during your trading activity. Be aware that most binary options brokers provide some glossary packs too, but in most cases this pack of terms is usually quite limited. We are about to disclose to you everything that you really need to know, so if you are motivated and focused enough, let`s get started with the quick and effective education course now!

Common Glossary For Binary Options Trading – Basics

Let`s begin with some of the most common terms from the binary options trading glossary. After all, proper and gradual learning is the most optimal course. Besides, by studying the glossary step by step, it will be easier for you remember the most significant words from the binary options glossary!

Review

Review

Asset

The asset is the underlying tool or instrument that is chosen for binary options trading contract determinations. Assets can include stocks, indices, commodities and the different currency pairs you trade with.

At the money

With this term, we talk about the instant in time, in which the targeted value of a binary option becomes the same as the price of the underlying asset selected by the trader.

Current price

The current price is the value (the amount) that is determined in almost real time and it is the opposition of the most price information that is in many cases delayed by a particular period of time – about 15 minutes.

Time of expiration

Usually known as expiry time, with this term we point to the date or the time, when the value of the underlying asset will be compared to the strike price in order to form the final outcome or your payoff. At the expiry time (time of expiration) the binary option you traded then becomes void and ceases to be traded.

Best Binary Options Brokers 2020:
  • BINARIUM
    BINARIUM

    Best Binary Options Broker 2020!
    Ideal for beginners!
    Free Demo Account + Free Trading Education!
    Get a Sign-up Bonus:

  • BINOMO
    BINOMO

    2nd place in the ranking!

In the money

If a binary option is in the money, then it has value upon the expiry time. Usually, a put binary option is in the “in the money” status when the underlying security price is below the strike price. Alternatively, a binary call option becomes “in the money”, when the underlying security price goes above the strike price.

Strike price

Speaking of strike price above, let`s figure it out what this term means. The strike price, in a few words, is determined by the underlying security price at the very moment when the binary option is purchased and the contract is made. Once the binary option reaches its expiry time, the underlying security price must be compared to the strike price in order to see if the binary option has won, or lost its value, or in other words whether it is in the money or out of the money.

Payout

The payout is the value of money that you as a trader receives as a profit from binary options trading activity as to a particular binary trade.

Boundary instrument

This is a kind of a tool that is applied by the traders in order to make the prediction about the underlying asset value – and to be more specific, whether this value will expire during or out of the set of ranges – simpler and quicker.

Glossary Terms for Advanced – Learn the Following, too!

Even though a little bit more specific, the following terms from our glossary are also important to be learnt, known and applied during your binary options trading activity. We divide our specially tailored glossary in two parts in order to simplify it for you, and to offer you a quick pause during your learning process. But let`s not lose any more time, and begin with the next portion of significant binary options additions in our fantastic and helpful glossary!

Bear market

This is where the market (that is usually referring to a financial or stock market), prices are almost in all cases in a downward trend.

Bull market

This is where the market (that is usually referring to a financial or stock market) prices are almost in all cases in an upward trend.

Commodities

Commodities are the types of assets that you can purchase a binary option to trade in. In general, the commodity is a physical object and it can be a precious metal – gold, silver and etc – as well as a manufacturing resource like cotton or even petrol. The price of each of the commodities we have chosen (and the rest of them) is determined according to many economic factors and changes.

Currency

Currency is another asset that you can trade with. Note that currencies usually come in pairs, and the most common among them – USD/GBP, EUR/CAD and etc – may be found in almost any binary options broker.

Currency Price

The currency price is the other name of the market price term. This is the present value of the underlying asset and it is always announced in real time – i.e. with no delays by the financial information provider.

Deposit

The deposit is the amount of money you invest with a binary options broker, when you complete a registration and create an account. This is the total value you put into the brokerage e-wallet of yours to make trades with.

Early closure

The early closure is the moment when the traders receive the possibility to close a binary option which then, instantly causes it to expire, ceasing the contract.

Index binary

With the glossary term index binary we describe the binary option which has underlying an asset that is measured to an index. Such binaries can be understood by these examples: Dow Jones, FTSE-100 and etc.

Investment amount

When you purchase binary option to trade it, you pay a particular value and this is the investment amount. These amounts – prices – vary according to the binary option, the market, as well as the broker you are signed with – from $1 to $1000.

Refund

Popular in trading experience in general, this glossary term refers to the entire (or a part of) amount of your investment you have returned to you in a situation when the binary option expires at the money.

Return

The return amount is the amount that you earn right after the purchased binary option expires in the money. The return value ranges according to the instrument you have traded with your binary. The particular asset you have chosen, as well as the broker type you are trading on, also affect for the return value. Since the return value is always pre-determined, you know in advance the eventual loss or profit you will get from the purchased binary.

Stock

A type of asset, this is the financial share of a company – for instance Microsoft, Samsung, Twitter – and etc which you trade with.

Withdrawal

When you reach a moment that you have earned a fair sum of money from your binary options trading activity, then, you will want to have this money withdrawn from your brokerage account and deposited in your your debit card or bank account. To receive this money, you will have to make a withdrawal. Note that the withdrawal methods and terms and conditions are different between brokers, and depend on the broker you are trading in with binaries.

Charting

With charting you practice plotting a binary option value at some very beneficial moment of time. Charting in general is a tool and it is a way of trading with binaries. The main purpose of charting is to be helpful with technical analysis.

Technical Analysis

And since we have mentioned it, let`s explain the technical analysis term, too. This is the analysis – and the usage of it – when you want to undertake research in advance and to find out additional data points in order to make your prediction of the prices and the market movements of the assets you have chosen more optimal and profitable.

Feel free to start your learning course with our helpful and very useful binary options trading glossary now! We are sure that it will be very supportive to your overall education in the field, so do not lose any more time and start learning right away! Good luck!

Binary Option Basics For Beginners

Let me guess …you’re new to binary options.

Maybe you heard this was the fastest way to make millions of dollars …while you sleep. Or perhaps you heard from a friend binary options trading is like gambling online.

Either way, here you are and you want to know where to start.

Guess what? This page is going to help you do just that. Here’s what you’ll find below:

  • Recommendations for the best brokers for beginners.
  • How to create an account and what to expect when you do.
  • How to make your first trade.
  • A binary options glossary.

I suggest following along, if possible. By the time you get to the end you’ll of made your first trade and will be well on your way to becoming an intermediate trader.

Best Binary Options Brokers For Beginners

Below you’ll find a list of binary options brokers we feel are best suited for beginners. These brokers were chosen based on their onsite education and demo options. Two things all beginners need.

Broker Early Expire Average Return Min Deposit Min Trade Rating More
95% $ 250 $ 1 ★★★★★
× 95% $ 250 $ 1 ★★★★★
× 85% $ 250 $ 1 ★★★★
REVIEW MIN DEPOSIT AVG RETURNS VISIT BROKER
$250 100% VISIT SITE
$10 80% VISIT SITE
$50 160% – 180% VISIT SITE
$250 95% VISIT SITE
$250 80% – 90% VISIT SITE

Creating an Account & What to Expect

Let’s first cover the basics to creating an account.

The first thing you’ll do is find the ‘create an account’ link when you hit the broker’s website. Most will have a form on their homepage you can fill out, too. It’ll ask for your name, phone number, email address and what password you want to use.

If you want to trade for real money I suggest you use a real phone number.

And that’s because the broker will give you a call. There are a few reasons why.

  • To welcome you to their platform.
  • To tell you about – and sell you on – their upgraded accounts. I’ll explain what these are in just a minute.
  • To tell you about – and possibly sell you on – more expensive forms of education, strategy and tools.
  • To tell you about their bonuses (and what you have to do to get them).

You should expect them to be somewhat sales-y on the phone. But you don’t have to buy anything.

Regarding the upgraded accounts – not every broker will offer different levels. But those that do will require you to deposit so much money for every level. And here’s what you can get out of it.

  • Bigger deposit bonus
  • Free cash outs
  • Expedited cash outs
  • Cash back or higher amounts of cash back / return on money lost
  • Different return percent (higher winnings)
  • Access to tools like signals or bots
  • Market reviews
  • Strategy sessions
  • Risk free trades
  • Personal account manager

Are the perks worth it?

That’s up to you to decide. But most feedback I’ve seen points to no. So I wouldn’t feel pressured to deposit any more than you were originally planning to – with one exception:

Some brokers will have their first tier starting at $50 or $100 more than their minimum deposit. In those cases I would go ahead and deposit the difference. The free cash outs, demo access and other perks will make up for it.

Other than that the most common question I see from beginners is whether or not they should take the broker up on their bonus offer.

My answer – no. Let me tell you why.

All bonus offers come with terms. The general idea is you have to wager so many dollars relative to the bonus BEFORE you can cash anything out. This is to prevent people from abusing the bonus (depositing, getting the bonus and immediately cashing out).

But since the terms are so hard to fulfill it also doubles as a sneaky way to keep your money on their site, which you’ll trade with and likely lose.

So my suggestion is to avoid the bonus. At least for your first trading account. That way if you make any money you can cash it out with no questions asked. You can always sign up elsewhere down the line and take them up on their deposit bonus.

Alright, now with money in your account it’s time to make a trade or two. The next section will explain how to do it.

Binary Options Trading Basics (How to Make Your First Trade)

At this point you should have chosen a broker and created your account.

Now its time to make your first trade. Here’s the gist of how the process works.

The broker has a list of assets that fall under four major categories – forex, commodities, stocks or indices. Each asset’s value is dynamic – it’s changing by the second. Your goal is to predict if the value will increase or decrease within a specific time frame.

If you’re right, you win money. If you’re wrong, you lose money.

Let’s look at an example –

Right now on Spot Option the asset EUR/USD is valued at 1.08837. If I call the value will need to rise to 1.08838 or better within 60 seconds for me to turn a profit. If I chose the put option the value will need to decline to 1.08836 or worse to turn a profit.

That’s it. It’s really that simple.

You have lots more options than this, from expiries to types of trades to assets. It’s not hard to understand them all in theory, but making the trades can be confusing. That’s why I suggest you make a simple trade like my example above. After a handful of trades you’ll have the basics down and can move on to more complex options and strategies.

And likely make more money in the process.

Trading Glossary

Half the battle for beginners is just understanding the lingo thrown around. So here’s a glossary you can refer to with commonly used words and their meanings.

Asset Underlying instrument used to determine a contract. An asset will fall under the category of currencies, commodities, stocks or indices.

At the Money When an option expires at its strike price. A tie. No profit or loss for the trader.

Binary Option – A yes or no prediction on whether or not an asset will increase or decrease in value by a specific date and/or time.

Broker – The host of a trading platform.

Call – One of two binary option choices. You ‘call’ if you think an asset will increase in value over a specific time frame.

Commodities – Goods that are grown or mined.

Currency Pair – A forex rate determined by matching the value of one currency to the value of another.

Current Price – The value of an asset in real time. This is the amount you base your (trading) decisions on.

Expiry Level or Price – The value of an asset when the option expires.

Expiry Time – The date and time an option expires and cannot be traded further.

In the Money – When an asset reaches expiry and is profitable. This also refers to your overall win-rate as a percentage. If you make it in the money 50% of the time, that means half your trades have been profitable.

Index/Indices – Comprised of multiple stocks. The value reflects the individual prices of underlying securities. For example, the Dow Jones Industrial Average.

Investment – How much you deposit. This also refers to how much you’re investing in a specific trade/option.

Market Price – The value of an asset.

No Touch – When a trade doesn’t reach a specific level. This is also a trade option where you predict if a trade will or will not reach a specific level.

Out of the Money – When your predictions are wrong or unprofitable.

Payout – The amount of money (in profit) earned when an option expires in the money. Usually in the form of a percentage.

Put – This is the opposite of a call. You’re predicting an asset will decrease in value over a specific time frame.

Refund – An amount given back to the client after the option has reached the money (after it expires).

Return – An amount of money given back to the client after the option has expired in the money.

Strike Price – The value a binary options contract for an asset is sold. This also helps you determine if a trade was profitable.

Target Price – The amount an asset must reach for a trade to be profitable.

Touch – A trade that meets or exceeds a specific value (often within a specific time frame).

Binary Options Brokers – Glossary

Binary Options Brokers – Glossary of terms before trading with your broker

Here is a list of the most common trading terms used in the world of Binary Options and Forex Trading. While we don’t expect you to know every single one of them without stumbling right off the bat however, we do recommend giving this hand glossary a once over before reading any further.

It isn’t that we doubt your level of intelligence, but the world of finance, investment banking, and Forex Trading can be a little volatile. The market won’t wait for you to learn your terms, nor should it. This is serious business, and even if you don’t get good at trading Binary Options, well, at least you can sound like you know what you’re talking about.

Asset
An asset is the object of value of which you will be trading. This is more commonly known as stocks, commodities, etc.

At-The-Money
If an option’s Expiry Price is similar/identical to its original buying price, it is referred to as being At-The-Money. In this case, instead of making a profit or losing it all, traders will actually just receive the entirety of their original investment back. Essentially breaking even.

Binary Options
The exciting, risky method of Forex Trading in which one either makes a predetermined amount, or makes nothing at all.

Call Option
This option provides a trader(s) with a concrete, predetermined profit so long as the underlying asset’s value is higher by its Expiry Time than it was at the moment of purchase. Most common form of Binary Option.

Current Price
Self-explanatory. This is the most recent value of an asset according to the most up-to-date data available.

Digital Options
Essentially just another name for Binary Options, once again playing off of the binary aspect of the trade.

Expiry Time
This is the lifespan of an option, or, more accurately, the last moment of its life. If an option has not reached the desired result by this time and date, it never will (as far as the current trade/option is concerned).

Fundamental Analysis
Very In-depth analysis in which every potential outside force is considered, and also determined as to how it/they may/will affect the value of an option.

In-The-Money
This is the ultimate goal every trader has for his/her option. When something is considered to be In-The-Money, it means that an option has reached (or exceeded) the desired Strike Price by its Expiry Time.

Out-of-The-Money
The not-as-desired outcome for an option. This refers to when an option’s value fails to reach the Strike Price by its Expiry Time.

Put Option
An option that favors Out-Of-The-Money results. Traders succeed when the underlying asset price is lower by its Expiry Time than the price at which it was originally purchased.

Range Option
A Range Option requires that traders predict whether or not an asset’s value will fall in or out of a particular, pre decided range come an option’s Expiry Time.

Strike Price
The target price. The goal. The price at which an asset must reach by its Expiry date, which determines whether an option ends in or out-of-the-money.

Technical Analysis
Speculative Analysis, mostly. Analysts look at an asset’s past trends in order to predict its further behaviors.

Touch Option
Very similar to a Call Option, a Touch Option asks that traders predict whether or not an asset will “touch” a predetermined Strike Price, only it must do so before its Expiry Time.

Best Binary Options Brokers 2020:
  • BINARIUM
    BINARIUM

    Best Binary Options Broker 2020!
    Ideal for beginners!
    Free Demo Account + Free Trading Education!
    Get a Sign-up Bonus:

  • BINOMO
    BINOMO

    2nd place in the ranking!

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