Out of the Money28 Feb 2013, 10:00
Binary Options at a Glance Thursday
In this edition we’ll explain the term Out of the Money, which is widely used in binary options.
There are two outcomes when you place a binary options trade; that the option will be “In the Money” or “Out of the Money” (there is a rear occasion that it ends up “At the Money”).
Out of the Money
Out of the Money is when a trader makes a binary options trade which finishes at a loss.
For example if you place a “Call” option, it will be Out of the Money if the price at the time it expires is lower than the price when it was purchased. If you place a “Put” option, and the price at expiry is higher than the price it was purchased, it will be Out of the Money.
Usually brokers offer 0-10% loss back of your investment, if the option finished Out of the Money.