Binary options are contracts giving traders the right to buy or sell a specified amount of an instrument, at a certain price on a pre-defined time. When trading Binary options, the trader has the power to control not only the instrument and the amount he trades, but also when and at what price. Options can be traded for a day, a week, a few months or even a year. Trading options is a mystery for many people. Many would choose trading spot over options, but once getting into the options – traders get hooked. The variety of choices, with the ability to control all aspects of a trade, properly balancing risks and rewards, welcomes traders to an exciting world where all options are open.
There are some unique terms in the Binary options trading world, and one must know them before starting to trade. There are two types of options: