The Ask is the market price for buying an asset. In binary options, this is used in the calculation of expiry levels.
An asset, also known as an instrument, is a product that can be traded on the financial markets. An asset can be a currency, a commodity, an index, or a stock.
At-the-money refers to coming out even. This means that the value of the option is the same at the close, as it was at the opening of the trade. The trader is fully refunded in such cases, irrespective of whether they predicted a rise or a fall in the value of the option.
The bid is the market price for selling an asset. In binary options, this is used in the calculation of expiry levels.
Binary options trading, also known as digital, or fixed rate options (FROs) trading is where options are traded at a pre-set price. The amount that the option rises or falls is not relevant to the payout. Only the direction counts. When trading binary options you simply choose whether the selected instrument is going to go up, or down, over a given period of time.
A call option allows the trader to benefit from a prediction that by the time the trade expires, the value of the asset will have risen above the opening price.
Commodities are raw products that are traded on the markets. They include Crude Oil, precious metals such as Gold and Silver, and agricultural instruments, such as Coffee, Wheat, Sugar and Corn. To see the full array of commodities options offered by TopOption, check out our asset index page.
The expiry rate is the price of the underlying asset at the time – the option expires.
The expiry time is the exact time and date at which the trade closes and the option expires.
In-the-money refers to a successful outcome. This means that at the expiry time, the asset had gone in the direction that was predicted by the investor at the opening of the trade.
Indices are exchanges around the world, where stocks are traded, for example the American Dow Jones 30 and NASDAQ, the European FTSE 100, or the Asian NIKKEI. To see the full array of index options offered by TopOption, check out our asset index page.
The mid-market price is the average between the ask (purchase) and bid (sale) prices. It refers to the actual market price for the asset, with no spread.
In binary options the investor can trade any financial product, without having to purchase the actual asset. When trading a commodity such as Gold, or a stock, like Apple, the trader is not physically buying and selling the product. They are trading a virtual stand-in called an option (also known as an underlying asset). An option is therefore a virtual asset that represents the real-time movements of the actual asset.
Out-of-the-money refers to an unsuccessful outcome. This means that at the expiry time, the asset had not gone in the direction that was predicted by the investor at the opening of the trade.
A put option allows the trader to benefit from a prediction that by the time the trade expires, the value of the asset will have fallen below the opening price.
Stocks represent a percentage of a company and the stock holder owns a share of its profits. Stocks can be held on any company on the stock exchange from Google and Facebook, to Apple or IBM.