A stock, commodity, currency, or index.
At The Money
When the option expiry price is the same as the buying price.
Also known as Digital options or FROs, it is a prediction of the direction a stock, commodity, index, or foreign currency will take by a designated expiry time.
When the trader has chosen the upward direction for an asset price by expiry.
The price of the underlying asset at the time of expiry according to the real-time market price. The expiry price determines whether the option has expired in-the-money or out-of-the-money.
The designated time and date at which an option expires.
In the Money
A trader’s option is in-the-money when his prediction on the direction (regardless if it was above or below) was correct. Options expires in-the-money, and the trader receives the full payout even if the trader was correct by a single pip.
The amount invested in a specific option.
Out Of The Money
A binary option is out-of-the-money when the trader’s prediction was incorrect regarding the direction of the price by expiry time. The trader will then receive 10% of his investment amount.
The percentage amount that the trader will receive at option expiry.
When the trader has chosen a downward direction for the asset price.