Glossary

Short, exact definitions of the terms you will meet on a trading platform.

Binary option: A contract that pays a fixed amount if a yes/no condition about price is true at expiry, and loses the stake if it is not.
Call (Higher): A trade that wins if price at expiry is above the strike price.
Put (Lower): A trade that wins if price at expiry is below the strike price.
Strike price: The price level the outcome is measured against — usually the price when you open the trade.
Expiry: The moment the trade closes and the result is decided, from a few seconds to hours after opening.
Payout: The profit on a winning trade as a percentage of the stake. An 85% payout on $10 returns $18.50 in total.
Stake: The amount you put on one trade and lose in full if the trade loses.
In the money (ITM): A trade that would win if it expired now.
Out of the money (OTM): A trade that would lose if it expired now.
At the money (tie): Price at expiry equals the strike. Most brokers return the stake.
Break-even win rate: The share of trades you must win to neither gain nor lose: 1 ÷ (1 + payout).
OTC asset: A broker-made price stream offered when the real market is closed, such as at weekends. It does not come from the interbank market.
Demo account: A practice account with virtual money and real price feeds.
KYC (verification): Identity checks a broker runs before withdrawals: ID document, proof of address, sometimes a selfie.
Deposit bonus: Extra trading funds added to a deposit. Usually it cannot be withdrawn until you reach a trading-volume requirement.
Turnover requirement: The total amount you must trade before a bonus or the funds tied to it can be withdrawn.
Candlestick: A chart bar that shows the open, high, low and close for one time period.
Timeframe: The period each candle covers, e.g. 1 minute or 5 minutes. It is separate from the expiry.
Support: A price area where falling prices have repeatedly stopped.
Resistance: A price area where rising prices have repeatedly stopped.
Trend: A sustained move in one direction: higher highs and higher lows, or lower highs and lower lows.
Range (sideways market): A market moving between support and resistance without a clear trend.
Volatility: How much and how fast price moves. High volatility makes short expiries less predictable.
Liquidity: How much is being traded. High liquidity means smoother prices and fewer sudden jumps.
Trading session: The business hours of a major financial centre: Sydney, Tokyo, London or New York.
Session overlap: Hours when two sessions are open at once. London–New York is the most liquid.
Pip: The standard smallest price step for a currency pair, usually the fourth decimal (0.0001).
Spread: The difference between buy and sell price. In binary options the broker’s edge is mainly in the payout instead.
Martingale: Doubling the stake after each loss to win back losses. A long losing streak makes stakes grow until the balance runs out.
Money management: Rules for how much to risk per trade and per day so that losing streaks do not end the account.
Win rate: The share of your trades that win, measured over a large sample.
Expected value: The average result per trade over many trades: win rate × profit − loss rate × stake.
Technical indicator: A calculation on price or volume drawn on the chart, such as RSI or moving averages.
Moving average: The average closing price over the last N candles, redrawn as each candle closes.
Divergence: Price and an oscillator moving in opposite directions, often a sign of fading momentum.
Economic calendar: A schedule of data releases and central bank decisions that can move prices.
NFP (Non-Farm Payrolls): The monthly US jobs report, usually on the first Friday, one of the biggest scheduled market movers.
Offshore broker: A broker licensed in a jurisdiction other than the client’s country, usually with lighter rules and weaker client protection.
Withdrawal: Moving money from the trading account back to your bank, wallet or crypto address.
Copy trading: Automatically repeating another trader’s trades. Past results of the copied trader do not predict future ones.