By admin | April 18, 2014
Binary Options Terminology
Before diving in and starting to trade binary options there are several important terms you need to know. These terms will help you navigate trading binary options and will give you a better understanding of how binary options work. Getting a grasp of binary options terminology is a very important first step.
Binary options are a type of derivative. What this means is that the binary options represent a specific asset class. This asset class may refer to a specific currency pair or it may refer to a market index. The asset value refers to the change in price of the particular asset class.
When trading binary options there are two choices that the binary options trader must make. First of all the trader must select the investment amount. This is the amount that is placed on particular binary options trade. Next the binary options trader must to select the expiry time. This is the timeframe that the particular binary option will expire. Many brokers offer expiry times of one minute, five minutes, 10 minutes, 15 minutes, 30 minutes, 45 minutes, and one hour. A particular asset class may behave quite differently over these various time frames.
There are two terms which are quite frequently associated with binary options they are call options and put options. A call option refers to an option where the trader is forecasting that the asset class will increase in value. A put option is referring to when the trader is forecasting that the asset class will decrease in value.
This basic information should help you navigate the initial steps in trading binary options.
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Trading Forex and Derivatives carries a high level of risk, including the risk of losing substantially more than your initial investment. Also, you do not own or have any rights to the underlying assets. The effect of leverage is that both gains and losses are magnified. You should only trade if you can afford to carry these risks. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved, and seek independent advice if necessary. A Financial Services Guide (NYSEARCA:FSG) and Product Disclosure Statements (NYSE:PDS) for these products are available from Core Liquidity Markets Pty Ltd to download at this website or here, and hard copies can be obtained by contacting the offices at the number above. Please also note that your call may be recorded for training and monitoring purposes. Any advice provided to you on this website or by our representatives is general advice only, and does not take into account your objectives, financial situation or needs. You should therefore consider the appropriateness of our advice before making any decision about using our services. You should also consider our PDSs before making any decision about using our products or services. Note that the information on this site is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Disclaimer: Core Liquidity Markets refers to Core Liquidity Markets Pty Ltd. Core Liquidity Markets is an Australian firm registered with ASIC, ACN 164 994 049. Core Liquidity Markets is a Corporate Authorised Representative Number 443832 of GO Markets Pty Ltd AFSL 254963 the Authorizing Licensee and Principal