More terms in the options market – Binary Options, binary options trading, trading binary
There are many terms and definitions that are used in the binary options trading that one needs to be accustomed to, so that one can easily take up the trading binary as per ones’ choice, after understanding it completely.
a) Ask - This is the dispersed price which is an indicator of the price at which options can be purchased at respective exchanges.
b) At- the Money – or ATM in short – is the binary options when the asset which is being traded currently is at the price at which the strike is.
c) Bid - the dispersed price which is the indicator that options could now be sold at the various exchanges.
d) Call - Is one of the binary options where the owner has the right to buy the asset at the strike price, but does not have the obligation to do so. There are two styles to this as well, the American – the option which can be acted upon before the expiry and the European – is the option style which can be acted upon only after the expiry. This is the trading binary which is helpful.
e) Covered write or a covered Call – this is defines as a place in which the call option is done against a position of the stock which is long term. This is the trading binary which comes handy.
f) Fast Market - When the market is changing quite rapidly or when the period is such that it ahs technical problems, that exchange can in this case declare the market as “fast market” where the price quotes are not so reliable and certain electronic access systems go off, due to this.
Thus one needs to be cautious as in the period of a “fast market”, one would have problems in either to execute or to cancel orders. This is a part of the binary options trading, that one can opt for. g) Volatility – This is the variations that the stock market has, which can be measured.
The market which moves at a faster pace either way – whether go up or down, drastically, then the market is said to be volatile. h) Strike – Whenever an binary option contract is exercised, this is the price at which the stock is traded. There are many types of stocks that are available, in these options. These are some of the terms used in the binary options trading.