Basic Terminology Of Binary Options

[Lucas]

This article is for those, who just want to start binary options trading but not understanding the terms. So, what are the basic terminology of Binary Options?

1. Current price: the price of the underlying asset.

2. Strike price: the price of the underlying asset when the binary option is purchased.

3. Expiry price: the price of the underlying asset at the time of expiry of the binary option.

4. In-the money: a successful option trade i.e. a CALL option that expired above the strike price or a PUT option that expired below the strike price.

5. At-the-money: an option trade in which the price during expiration is identical to the level at which the option was bought–in such a scenario the initial investment amount is fully returned to the customer.

6. Out-of-the-money: a failed option trade i.e. a CALL option that expired below the strike price or a PUT option that expired above the strike price.

Source: binaryoption