A trade that closes at a price higher than the “Strike Price”, also known as the “Exercise Price”, which is the underlying “Asset” or “Instrument” at the time the trade is placed.
The price that a seller is willing to accept for a specific asset or security, i.e., the price at which an investor can purchase an asset or security.
The “Asset” or “Instrument” is the underlying index, stock, commodity, or currency on which each binary option contract is based.
AT THE MONEY
When the underlying “Asset” or “Instrument” price is the same as the original “Strike Price”, also known as the “Exercise Price”.
A formal term used to describe a trade that closes lower than the original “Strike Price”, also known as the “Exercise Price”.
The price at which an investor is able to sell an asset or security, or the price at which a bank or brokerage is willing to purchase an asset from a private investor.
A type of option where the payout is a fixed ‘all or nothing’ amount known at the moment when the binary option contract is placed. Sometimes referred to as ‘’Digital Options’’ they have two possible outcomes. The trader predicts the direction of the trade for the underlying asset and the potential payouts are predetermined at the time of purchase.
A bonus (also called a ‘Trading Bonus’) is an amount of money that Stern Options credits to your trading account, giving you additional leverage and liquidity.
BOUNDARY OR RANGE INSTRUMENT
An instrument that allows the customer to choose whether the value of an underlying asset at expiry will fall inside or outside a specified range. The range is demarcated by lower and higher target price limits.
A “Call Option” is the option you choose to invest in if you believe that the expiry price will be higher than the strike price.
Commodity is a general term for raw materials produced by a variety of sectors including energy, food and metals; e.g., Gold, Oil, Silver, and Coffee are examples of Commodities.
Currencies are national forms of banknotes/coins. Currencies are organized into pairs for binary options. E.g., EUR/USD; GBP/USD
The ‘’Current Price’’ is the contract price for each asset on Stern Options trading platform. It mirrors the asset prices in the actual stocks, currencies and commodity markets.
DECLARATION OF DEPOSIT (DOD)
When you deposit money into your Stern Options Account, we will send you a DOD to sign and to send us a scanned copy. The DOD is your declaration that you agree to the deposits. It is part of Stern’s Anti-Money Laundering policy.
The “Exercise Price”, also known as the “Strike Price”, is the price of the underlying “Asset” or “Instrument” at the time you make a binary option contract. At the contract’s expiry time the asset’s “Expiry Price” gets compared to the exercise price to determine whether the trade contract finished either “In-The-Money” or “Out-Of-The-Money”.
Also known as the ‘’Expiry Level’’ and ‘’Expiry Rate’’, this is the value of an underlying asset at the moment a binary options contract expires.
The expiry time is the time and date at which a binary option contract will automatically expire. Binary options have a fixed life term which you choose at the moment of purchasing the binary option contract. The expiry time is expressed as a date/time.
Binary Options have a ‘’Fixed Return’’ which is all or nothing. The actual amount is known at the moment the contract is made therefore.
The market prices of currencies, commodities and stocks are evaluated by analysts in many ways. ‘’Fundamental Analysis’’ is concerned with current economic and political data affecting the markets. In other words, it’s the evaluation of an asset by looking at all factors that could affect its price, e.g. weather, financial policy, global economic conditions, company reports, etc.
A binary option contract is ‘’in-the-money’’ when the predicted direction for the price movement on the underlying asset (regardless of whether it was above or below, i.e., a ‘’Call’’ or a ‘’Put’’) turns out to be correct.
An Index is a list of securities representing a particular section of a financial market which acts like an imaginary portfolio. It is usually representative of a broad portion of a given market, but can also be focused around a particular industry. Examples of ‘’Indices’’ are: US Dow Jones Index; UK FTSE; Japanese Nikkei.
The “Instrument” or “Asset” is the underlying index, stock, commodity, or currency on which each binary option contract is based.
The amount invested in a specific option.
A ladder option is an option contract that allows the investor to earn a profit as long as the underlying asset’s market price reaches one or more of five levels for the strike price before the option expires.
LONG TERM OPTIONS
Long Term Options are binary option contracts with time-frames from one week up to ten months.
The sum of all your open positions, (i.e., contracts already placed which are not yet expired).
One Touch binary options are contracts in which the trader stays in-the-money if the underlying asset reaches a predefined strike price prior to the contract expiry time. This is a unique feature as the result is determined during the trade rather than at the end of the trade.
A trader is “out-of-the-money” when his/her prediction on the direction of the asset price, regardless of whether it was above or below the strike price, was incorrect. The trader will then receive no payout on that contract.
The percentage amount that the trader will receive at option expiry.
A Pip or “Point In Percentage” is any of up to four “decimal points” to the right of the decimal in price values. For example, 0001 = 1 pip; 0010 = 10 pips; 1.4567 = 1 plus four thousand five hundred and sixty-seven pips.
The “Profit” is the amount that you “Earn” when you make a successful trade. For example, you stake $100 on the price of an asset to go up for a profit of 80%, if the contract expires “In-The-Money”, you earn $80 profit plus you receive your investment stake back for a total return of $180.
A “Put Option” is an option that requires the asset price to close lower than the strike price when the contract expires.
The “Return” is the amount of profit that you receive when a contract expires in-the-money at the expiry time. For example, you stake $100 on the price of an asset to go up for a profit of 80%, if the contract expires “In-The-Money”, you earn $80 profit plus you receive your investment stake back for a total ‘’Return’’ of $180.
Signals are created by financial analysts with the intention of alerting binary option investors to exciting investment opportunities. Signals are sent as brief email bulletins. Signals should be regarded as a guide only and cannot be 100% accurate.
The Spot Follow tool allows you to monitor the performance of other investors on the Stern Options platform, giving you the ability to view the degree of successful or unsuccessful price direction positions.
The amount of money invested on a binary options contract.
The Strike Price, also known as the “Exercise Price”, is the price of the underlying “Asset” or “Instrument” at the time the contract is placed.
Technical Analysis is the mathematical study of the price of an asset. It is concerned with data and information as well as with the supply and demand factors and the minute detail belonging top trend lines, patterns and spikes on the chart of price movements.
An Underlying Asset is any asset (Commodities; Currencies; Stocks; Indices) that forms the basis for a binary option.