Binary Options Types and Structures Flashcards
7 cards from real Binary Trading practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Binary Options Types and Structures flashcards as text
What is a 'Ladder' binary option?
Answer: An option offering multiple strike price levels, each with its own predetermined payout percentage
A Ladder binary option presents several strike prices at different levels — the further the target from the current price, the higher the potential payout percentage.
In binary options, what is the 'expiry time'?
Answer: The predetermined moment at which the option's outcome is determined
The expiry time is the specific future moment when the binary option's outcome is settled — the asset price at that exact instant determines whether the trade wins or loses.
What is a 'Double One Touch' binary option?
Answer: An option that pays out if the price touches either of two target levels before expiry
A Double One Touch option pays out if the asset price touches either of two predefined price levels (one above, one below the current price) before the option expires.
What characterizes a 'Pairs' binary option?
Answer: Predicting which of two assets will outperform the other within a set time period
Pairs binary options involve comparing the relative performance of two assets (e.g., Apple vs. Google stock), with the trader predicting which will perform better within the time period.
Which statement best describes a '60-Second' binary option?
Answer: An option with an expiry time of exactly 60 seconds after purchase
A 60-second binary option expires exactly 60 seconds after being placed, making it the shortest standard binary option expiry available on most trading platforms.
What is the typical financial outcome when a binary option expires 'Out of the Money'?
Answer: Loss of the full invested amount minus any broker refund (typically 0–15%)
When a binary option expires out of the money, traders typically lose their entire investment, though some brokers offer a small consolation refund of 0–15%.
What does 'In the Money' (ITM) mean for a Call binary option?
Answer: The current asset price is above the strike price
For a Call binary option, In the Money means the underlying asset's current price is above the strike price, meaning if the option expired now, it would generate a payout.