Anybody who trades on financial markets in order to make profits. Anyone who as executed at least one trade could be called a trader in olymptrade glossary.
An option is one of a number of derivative financial instruments where the contract is that a specific condition will be fulfilled, rather than actually purchasing the asset in olymptrade glossary.
Olymptrade Currency options
These options are based on currency pairs. Trading with these instruments is done by predicting a change in the price of a specific currency relative to the other.
Strike or Initial price
The cost of an asset at the time when the trade opens, i.e. when the option is purchased. This price should either go up or down during the trade time that is specified in olymptrade glossary.
Call Option or Price rise
Traders open a bet that the price will rise when they believe that the currency pair’s price will go up. To open this type of trade, select the “Up” button.
Put option or Price decline
Traders open a bet that the price will fall when they believe that the currency pair’s price will go down. To open this type of trade, select the “Down” button.
This amount is invested in an option and the amount of profit depends on it. The option price can be monitored by the trader and if the forecast is right, the trader will receive up to 80% of the traded amount.
On OLYMP TRADE, a minimum amount that can be traded is $1 / €1.
Option execution or Expiration
This is the time when an option closes once the time that has been specified previously expires in olymptrade glossary.
This option gives traders a tool to protect themselves from negative trade results. If a trader realizes that their forecast is wrong and the charts move in the opposite direction than what they expected once the contract has been executed, they can cancel the trade to avoid the complete loss of their investment.
The amount of money traders put into their account before they can start trading.
A trend is a price direction in the market that is stable over a long period. A steady fall or rise is observed by ignoring small variations.
When trading options, diversification will reduce a trader’s risk by purchasing various assets that are not linked to each other. The philosophy behind this is “You win some, you lose some.”
Options which are based on stock indices, including RTS, Dow Jones, DAX and S & P 500,
Options which are based on commodities, including oil, precious metals or products in the food industry.
A trading session is the working hours of the biggest global stock exchanges grouped by geographical region. The 4 major trade sessions are European, Asian, American and Australian.
Brokers are intermediaries between retail traders and big commercial organizations on financial markets. Traders on OLYMP TRADE are provided with access to options markets.
For currency pairs, this is the minimum change in exchange rates. Most currency pairs are quoted to four or five decimal places, with the exception of USDRUB and USDJPY, which are quoted to three decimal places.
The price of an asset at a specific point in time.
Assets on which traders bid that the price will change. The assets can be commodities or currency pairs. Beginners normally begin with currency pairs.
A trade is closed after the trade time. If call options are bought, the asset’s price should be higher after the trade time, while the price should be lower for put options.
Expiration level or Option execution level
The price of a selected asset when an option expires. This result has to be predicted. For option trading, the actual price is not important, as traders predict if the price will be higher or lower than what it was when the trade opened.
This is profits from trades. Traders can monitor how their potential profits change as a function of their investment before a contract is executed. Options’ trading profit is 80%.
The period during which a specific asset can be bought and sold.
Market entry threshold
This is the minimum sum required in an account that will allow a trader to begin trading. On OLYMPTRADE the market entry threshold is $10 / €10.
Hedging can be seen as insurance against a financial loss by cancelling a trade option when it moves the wrong way.
This financial indicator measures the variability of an asset’s price. For a high volatility, the price of a specific asset changes rapidly. This shows that traders are very interested in the asset. For a low volatility, the price stays the same for long periods, or it may change somewhat.
Options that are based on securities or stocks of well-known and influential companies.