When starting your adventure with the binary options, take a look at the fundamental concepts of the system of assets movement betting. Without making such a preliminary study, it will be difficult to move on the financial market, even as a beginner. Of course, platforms created for this purpose are specially prepared and offer the possibility of trainings, giving advices and support of professionals, but common sense suggests to prepare properly before even making a final choice.
Let’s start from the beginning…
BINARY OPTIONS – assets, also referred to as trading instruments. One buys the options of such assets and determines whether within a specific time their price will decrease or increase.
CALL OPTION – an investment in the binary option, which presupposes that the price of the underlying instrument (asset) at the moment of option expiry will be higher than the initial price, that is the price of exercising the option. This option is also referred to as Up.
PUT OPTION – an investment in the binary option, which presupposes the decline in the price of the underlying instrument (asset) when the option expires. The price should be lower than at the opening, or buying the option.
IN THE MONEY – an option available for the purchase of CALL and PUT options. At the moment of the CALL option, it means that the price of the underlying instrument (asset) is higher than the exercise price. Therefore, an investor obtains an expected profit. In the case of the PUT option the situation is the opposite – in accordance with the principle, the term means that the price is lower than the base one, as expected, and luckily the profit also goes to the investor.
OUT THE MONEY – an option available for purchase of CALL and PUT options. At the time of purchase of the CALL option and at the end of the option, the price of the underlying instrument is lower and means the loss of the investor. At the moment of purchase of the PUT option and at the end of the option, it turns out that the price of the instrument is higher than the it was assumed by the forecast and, unfortunately, also a loss of the investor is incurred.
AT THE MONEY – when buying the CALL or PUT options, the price of the underlying instrument is equal to the execution price option, luckily, in this case no losses are incurred by the investor, but he also gains nothing.
EXECUTION PRICE – nothing less than the prevailing price for a particular asset at the time of commencement of option. This price is also referred to as a reference price. It allows you to determine whether at the moment of expiry, that is at the end of the option, the investment and decisions generated the profit, or if, unfortunately, the investor will incur a loss.
EXPIRY PRICE – the price of the underlying instrument and thus of the specific asset at the end of the option, that is the expiration of the option. It allows you to determine whether an investor incurred a loss, or if he earned much money.
EXPIRY DATE – the date and time of the end of the purchased option.
ONE TOUCH OPTION – one of the types of the binary options, which has the highest rate of potential profits that derived from a single transaction. A buyer choosing a OneTouch CALL option automatically assumes that the price of the underlying asset will rise and at the end of the option it will be at a higher level than at the beginning. By purchasing the OneTouch PUT option the opposite is true – it is assumed that it will decrease.
UP / DOWN OPTION – the most traditional type of binary options, which every beginner starts from. You can purchase the items in the CALL (up) system, assuming an increase in asset prices in relation to the initial price (at the time of the purchase), or a decrease, then you buy the PUT (down) option.
60 SECONDS OPTION – one of the options, and also a binary options strategy characterised by the greatest risk, but also the possibility of the largest gains. The options have a predetermined time which is no longer than 60 seconds.
OPTION BUILDER – the most advanced type of investment in binary options. It allows you to buy the option enabling independent determination of specific parameters, such as hunches, experience or the adopted strategy.
Knowing the basic concepts you can begin an exciting and emotional adventure with the binary options with a clear conscience. But remember – the most important are common sense and moderation!