Interested in trading binary options and don't know how to start?
Here are some basic terms that will help you gain profits when trading binary options.

Binary Options
Binary options, also known as digital options, or all-or-nothing options, are options that have only two possible outcomes (hence the term binary); either you're 'In the money' or you're 'Out of the money'.

Binary options are based on a variety of global financial assets; Binary stock options, options on commodities, forex binary options and index binary options. We offer 100 assets from a large range of markets, in a variety of sectors. Please take a look at our Trading Area to see the full list of available options.

Every binary option has a fixed payout. Payouts are known before you conduct the trade and are not affected by the magnitude of movement of the stock, commodity or currency pair's value. Meaning a movement of even a fraction of a point in the direction you anticipated is enough for you to be 'In the money'.

When executing a binary option trade you have to estimate whether the asset's value is going to be higher or lower upon the expiration time than it is when executing the trade:

Binary call option
If you think the price at expiration time is going to be higher than the strike price (the price at the moment you executed the trade) you should place a binary call option.

If indeed the expiration price is higher than the strike price and your prediction was correct, you will be 'In the money' and make a profit over your initial trading amount.

Binary put option
If you think the price at expiration time is going to be lower than the strike price (the price at the moment you executed the trade) you should place a binary put option.

If indeed the expiration price is lower than the strike price for the underlying asset, then you're 'In the money' and you will get the pre-known profit percentage out of your trade amount.

Binary option 'In the money'
The term "in the money" refers to a binary option trade that is successful, which means that the price's outcome upon expiration was in the direction you anticipated. For example, If you have placed a binary call option, meaning you estimated it will increase in value, and indeed the asset has a higher value (Expiration Price) upon the expiration time than in the time of executing the trade (the Strike Price) – than, in this instance, you will be 'In the money'.

Alternatively, If you placed a binary put option, meaning you estimated it will decrease in value, and indeed the asset has a lower value (Expiration Price) upon the expiration time than in the time of executing the trade (Strike Price), you will also be 'In the money'.

Binary option 'Out of the money'
The term "out of the money" refers to a binary option trade that resulted in an incorrect prediction. This means that the price's outcome upon expiration was in the opposite direction than what you have anticipated. For example, if you have placed a binary call option, meaning you estimated the asset's price at the expiration time ("expiration price") will rise above its strike price (the price when executing the trade) but instead it has a lower value, than your trade will be referred to as "Out of the money".

Alternatively, if you have placed a binary put option, meaning you estimated it will decrease in value, and instead the value upon expiration (Expiration Price) is higher than in the time of executing the trade, - than also you will be 'out of the money'.

Binary option 'At the Money'
An 'At the Money' outcome at expiration time in binary options describes a situation when the strike price (price at the time of executing the trade) is equal to the price of the asset upon expiration (expiration price). Another term to describe this situation is "the breakeven point".

Binary option payout
Binary options (AKA Digital options) have an extremely high payout, ranging from 68% and reaching even a 95% payout at EZTrader.com. Each option has a different payout written next to it and is something for you to know and consider before you execute the trade.

Underlying assets
When you trade binary options, you have to choose your trade from few main categories; binary options on commodities, forex binary options, indices, future indices and binary stock options.