Binary option - Binary options are also called digital options or fixed return options. When trading binary options investor must make a forecast price direction of the selected asset (increase or decrease in value) in a given time.
The underlying asset - when trading binary options they may be stocks and other securities, indices, commodities and currency pairs for which we can conclude fixed-term contracts.
Currency option - Type of binary option whose underlying asset is a currency pair. Usually, when trading binary options traders offered currency pairs group major, that is the main currency pairs such as EUR / USD, USD / JPY, GBP / USD and so on.
Time of exercise - To trade binary options have 4 time of exercise - the end of an hour, day, week and month. This means that choosing the time (period) of the option, the investor selects a point in time at which he considers his forecast for rising or falling asset prices will come true. In other words, at the time of the strike ends its duration, and at this moment is determined, the forecast proved to be correct or not an investor.
Deposit - The amount of money that a trader must pay to the account opened in the trading site / platform to start trading. Minimum deposit (refill) currently stands at $ 9.
Investment - The amount that the trader invests in a package option. As a rule, the minimum cost of a binary option is different from broker to broker and ranges from $ 1 to $ 25. If successful financial forecast trader receives payment of a specified percentage of their chosen investment amount. A trader can not lose more than their chosen investment amount, if his prediction did not come true.
Index / indices - The index represents shares.
Index option - Binary option, which is based on stock indexes, such as Dow Jones, RTS, DAX and so forth.
Call option (call-option) sold by the trader in the event that he believes that the price of the asset chosen by him at the time of exercise is higher than at the time of purchase.
End of the day - The closure of the trading day.
Turnover - The value that indicates the number of shares or contracts under which the operation is carried out on the platform during a certain time period.
Percentage of profit - Percentage of Profit - is the cost of the contract with the successful outcome of the transaction on binary options. Profit percentage set at the outset of the transaction. Thus, it does not change depending on the relative success of the transaction - whether the cost of the asset at the end of the term of the option on the 1 50 point or points higher compared to the original value of the asset, it does not affect the payout percentage of the transaction. Rate of return - a set percentage of the initial investment.
Put option (put-option) sold by the trader in the event that he believes that the price of the asset chosen by him at the time the option is exercised will be lower than at the time of purchase.
Degree of protection - A guaranteed return of the maximum amount of the original bet trader. Therefore, if the transaction with the acquisition of binary option was not profitable, did not end in the trader's favor, it will be returned to a small percentage of the original bet. The degree of protection is established before the transaction, as well as a successful payment transaction, which is also predetermined from the outset. Degree of protection serves as a comforting amount if Sledkov is not profitable.
Strike price (The level of the purchase option) - the value of the underlying asset at the time of purchase of the asset. During the execution of the option strike price (the level of the purchase option) is compared with the level of performance and is defined, the forecast proved to be correct or not an investor.
Current price - current market price of the underlying asset. Immediately after the acquisition of binary option price at which he would be purchased, becomes the starting price of the option. The current price of the option was determined according to the data obtained in real time from providers such as Reuters.
Trend / Trend - The trend is an important factor in the analysis of the contribution of funds to successful binary options. Trend - a movement of asset prices for a fixed period of time; the longer the period of time when the price moves stably in the same direction, the trend is clearer. Recognition trends / trend allows investors to make informed decisions based on the probability of future price direction.
Technical Analysis - Method of security investment by analyzing the statistics related to the dynamics of the movement of asset prices and volumes of contracts on a particular asset in the intervening periods. Charts and graphs, in addition to other research methods are used to identify the possible behaviors of the asset on the market in the future.
Commodity option - Type of binary option whose underlying asset is a commodity. In the commodity market is trading more 100 kinds of commodities, but a platform for trading binary options are usually a selection of the most popular commodities such as oil, gold, silver, coffee, sugar and so on.
Stock option - Binary option on the shares or securities. Usually, when trading binary options trader offered a choice of shares of the largest Russian and international corporations such as Microsoft, CocaCola, Rosneft, Gazprom, Lukoil, Sberbank and others.
Fundamental analysis - Method of assessing safety through the use of economic, financial and other additional factors. The aim is to analyze all the factors that may affect the safety, for example, general economic conditions, industrial production and other specific factors that ultimately may affect the value of assets.
Demand price - The price at which an investor can buy assets in the financial markets. Demand price affects the formula that is used to calculate the value of the asset.
Business hours - Each asset has its own clock, during which it is possible to carry out the auction and / or trading days when the asset is available for investment.
The level of exercise - When trading binary options, at a time when the term of the option ends, that is, the option is executed, the level of asset prices at the moment and will be the level of exercise. That is, if an investor bought a call option is valid until the end of the hour, at the end of the hour value of the asset and will be the level of performance. Level of performance is compared with the level of purchases and thus is determined to provide financial forecast for the investor is true or not.
In-the-money - This concept is usually not translated into Russian, and when trading binary options means that the investor is in profit during or after the auction. If the option is exercised, while in the area of in-the-money, you might receive the promise you a profit - depending on the platform of payment may be 65-85% of the investment.
Out-of-the-money - Also translated into Russian, and when trading binary options shows that the forecast of the investor is not justified or not justified. When the option is exercised in a state of out-of-the-money investors are not making a profit and losing money invested in an option.
I introduced you to the basic terms you may come across when trading binary options on the market. And now I would like to give more a few tips for beginners, So to speak, the beginners of binary options.
The main principle of binary options trading is to predict the direction of movement of the asset value. So first of all you need to find convenient for you the underlying asset, which will be convenient to work and that it will be easier to predict. It should be clear to you, you must clearly understand, from which the asset freezes, and then develop Trading Strategy. After all, this will directly depend on your future income. Study the market, watch financial market news and analysts' forecasts. Only then you can make the right financial forecast, guarantees a good profit.
Another important point in trading binary options - this is the right choice of runtime (expiration) option. A choice of Short-term options (From 30 seconds up to one day) and Long-term options (Forecast from a week to a month). The short-term outlook is more risky, but the profit you get very quickly. Long-term prognosis may be more likely to help you, but profits can be obtained only at the end of the week or month.
And last but not the least important point - until you do not have to confidence in the binary options market, invest small amounts. Increase the size of the investment can only be on the condition that you have already mastered, studied assets, to understand the levers of the market, developed trading strategies and obtain a trading experience. Only then you will be able to steadily increase your income!