Binary Options Glossary

ADVANCED RETAIL SALES

This statistic measures total sales in dollars at all shops. Retail spending is really a particularly large percentage of consumer spending.

A monthly measure of retailer's revenue from goods to consumers in the USA. Essentially retail sales are determined by accumulating all sale receipts, in nominal dollars from select retailers throughout the month except for certain transactions an example would be taxes, sale returns along with other financial changes. Advanced Retail Sales are vital in determining consumer demand on any monthly basis as opposed to the GDP which is usually released annually. Because consumer spending makes up nearly a third of all economic activity in America, Advanced Retail Sales are an important measure to understand the progress and volatility of consumer activity in the retail market.

AUSTERITY BUDGET

A national budget which aims to reduce the money that individuals spend, for instance by increasing taxes, or else towards decrease the amount that the government spends.

AVERAGE DAILY VOLUME

The daily amount shares or units traded. After a certain period of time, usually in a year's time the number of shares is averaged. Average daily volume of the Forex market is estimated to exceed $3 trillion. A keen investor should definitely be aware of the avg dv and the daily volume. It really is had the need to interpret the markets. Volume serves as a key factor in trading Forex

BALANCE OF PAYMENTS (BOP)

Your free account of payments and net transfers made between two countries. One of the two countries is named the “home country,” and the BOP is recorded from the viewpoint of the country. Both payments for goods and financial exports and imports are specified. When the BOP is consistently negative, this happens to be generally interpreted as a lack of economic stability. If the BOP is consistently positive, the reverse is true. These figures are vital in analyzing the currency market, when you can compare the B of P between China and Japan, or China and of course the USA it's possible to predict currency movements.

BASIS POINT

A basis point is often used to indicate small changes in financial rates and is measured as 1/100's of 1%. In particular one basis point will be 1.01%.

BEAR MARKET

A bear market happens when prices in market investments have decreased over an extended period of time. Often a bear market happens in times of rapid inflation, rapid quantities of unemployment or recession. All traders will need to understand the terminology and the difference between a bull as well as a bear market. Just because someone says it's a bear market does not allow it to be so, there are quite a few formulas used to make these decisions. A very good trader develops their own strategy to determine when the markets have changed direction. Trading currencies or commodities, stocks or indices is about strategies and knowledge.

BULL MARKET

A bull market occurs when prices in investments appreciate above usual. Generally this occurs either over the course of boom or recovery in the economy, or by investor psychology. See Bear Marketplace for more understanding

CALL or CALL OPTION

Often simply labeled a \"call\", serves as a financial contract between two parties, the buyer and of course the seller of the type of option The buyer of the call option has got the right, although not the obligation to purchase an agreed quantity of a particular commodity or financial instrument (the underlying) coming from the seller of the existing option with a certain time (the expiration date) for a certain price (the strike price). Them (or \"writer\") is obligated to sell the commodity or financial instrument should the buyer so decide. The buyer pays a fee (called a premium) for this right.

The customer of the call option purchases it in the hope that the value of the underlying instrument will rise in the longer term. Them of the existing option either expects that it will never, or is willing to give up many of the upside (profit) given by a price rise in exchange regarding the premium (paid immediately) and retaining the opportunity to create a gain as much as the strike price (see below for examples).

Call options are most profitable for the buyer whenever the underlying instrument moves up, creating the price of the main instrument closer to, or above, and the strike price. The call buyer believes it's likely the value of the underlying asset will rise from the exercise date. The risk is restricted to the premium. The profit regarding the buyer can be very large, and is limited by at which level the main instrument's spot price rises. When the cost of the main instrument surpasses the strike price, that choice is said to be \"in the money\".

The call writer doesn't believe the value of the existing underlying security is likely to rise. The author sells the decision to collect the premium and does not receive any gain when the stock rises above the strike price.

A trader must have a complete understanding of calls/puts; more profit can be made by buying PUTs the decision options as much investors and traders have trouble understanding the understanding of selling something you don't own.

CENTRAL BANK

The Central Bank name is used to refer to any nation's preeminent authority in monetary manners. In the US it is the Federal Reserve, in the United Kingdom it is the Bank of England as well as for Europe it's the European Central Bank. Every country possesses a central bank

CONTAGION

The \"contagion effect\" described within the eurozone crisis is the fear that you country's financial problems will spill up to another country. This happens because the capital markets -- where sovereign bonds are purchased and sold -- can be influenced by sentiment in addition to fundamentals of each country. Contagion could also occur because the more countries within the bloc struggle, the upper the price to others of giving aid.

EURODOLLAR

It is each time a foreign financial establishment, usually in Europe, hold US dollars. It really is usually in effect of firms, away from the US, being paid for their goods or services from US clients. If you are trading the Forex markets, you need to understand all forms of currency.

EUROZONE

The euro will be the common currency being used by a bloc of countries contained in the Eu. The 17 states which use the euro -- including Germany, France, Italy and Spain -- form the eurozone. A further 10 EU nations -- which includes UK, Sweden and Denmark -- continue to use their very own currencies.

EURO-ZONE GROSS DOMESTIC Gadget

As one of the most valuable economic measurements within the economy, GDP (which is measured in real and nominal terms) determines the value of goods and services produced in countries contained in the Euro-Zone area. See definition under Gross Domestic Product and also look at United States Gross Domestic Product

EUROPEAN CENTRAL BANK (ECB)

The European Central Bank, headquartered in Frankfurt, Germany, was set up in 1998 to preserve monetary policy regarding the eurozone under its common currency, the euro. The ECB's mandate usually is to keep inflation at around 2% or below, and ensure some level of stability for the countries which use the euro. Like other central banks, the ECB's main tool for keeping to these targets is by raising or lowering interest rates -- a key tool for influencing financial markets. The ECB has also been actively buying the sovereign bonds of troubled eurozone economies, with the aspiration that it's going to lower those countries' funding costs.

EUROPEAN FINANCIAL STABILITY FACILITY

The European Financial Stability Facility (EFSF) is Europe's temporary bailout fund. It was hurriedly arrange after Greece needed its first bailout in May 2010, and also has since become a key tool to treat the debt crisis. European leaders have increased its lending capacity from around €250 billion to €440 billion, and therefore are investigating ways to boost its clout. A permanent bailout fund, the ecu Stability Mechanism, or ESM, ought to be available and accessible as early as the following year.

GROSS DOMESTIC PRODUCT (GDP)

GDP is displayed being a percentage and is an annual measurement based upon quarterly figures. It is calculated as shown below: GDP = Private Consumption Private Investment Government Expenditure (Exports - Imports)

GROSS NATIONAL DEBT

A country's total private and public outstanding debt. This effect is what the global debt crisis is about

GROSS NATIONAL PRODUCT

The Gross National Product (GNP) is calculated like the GDP plus the income earned outside the country from the nation's citizens without the income earned contained in the country by foreigners.

HAIRCUT

A haircut refers to a cut in the value of investments lenders are asked to bring. For instance, a 50% haircut on an investment means you'll get back only half of what you paid. Investors in Greek bonds have been asked to bring a haircut on their debt. It would be with their interest to do so if they thought the value of the debt could drop further sooner or later. Investors may also be asked to swap bonds maturing soon for longer dated ones which might distribute with a much later date.

INTERNATIONAL MONETARY FUND

The International Monetary Fund, which is headquartered in Washington D.C., is an organization of 187 countries. It really is created to assist countries in financial trouble. Member countries add to the fund, relative to their economies, when assistance happens to be needed. It has been a key player in the EMU bailouts.

ISM Producing

It's a measurement where US executives in the manufacturing unit are surveyed to acquire their expectations in future inventories, production, deliveries, new orders and employment. Because manufacturing fluctuations influence the overall economic trend, changes in this figure could have significant impact during the GDP. Furthermore, the ISM is definitely one of the most influential measurement in indicating economic turnarounds. For example if the ISM increases over times of recession, this means a jump in manufacturing demand and in consequence a upward jump in the economy.

LIQUIDITY

Liquidity can be used to refer to two different areas: liquid market and liquid asset. A liquid market serves as a situation in which investors out there are willing to trade securities at each price level. Also these kinds of markets are frequently known to have elevated levels of trading and therefore are safer to participate in. On the other hand, a liquid asset is an asset that may be easily converted to cash.

OVERBOUGHT/OVERSOLD INDICATOR

It's a tool designed to determine if price trends move suddenly or distant than normal. Overbought and oversold indicators together determine if prices have suddenly moved upward or downward and are calculated from the average of the number of advancing issues minus declining issues over a period of time.

OVERSOLD

It's a technical analysis (ta) term designed to check with an under priced stock or perhaps a stock which has occurred a massive fall in value.

PHILADELPHIA FED SURVEY - UNITED STATES

A report made by the Philadelphia Fed where they survey Third Fed District manufacturers on general business conditions. Whenever the Philadelphia Fed Survey is high it indicates that a possible increase in production as well as an overall positive outlook on manufacturers. This positive outlook and boost in production promotes economic growth as well as a growth dollar. Survey results are determined by taking the difference involving the percentage of negative and positive scores, where zero will be the center point.

PIP

A pip is the smallest increment of price within the Forex. It is 1/100th of 1%.It is the fourth decimal place out for many major currencies, except the yen..

For instance, shall we say GBP/USD rises from 1.9202 to 1.9207? You'd say, “The pound has risen five pips against the dollar.”

The Japanese yen is different as a single yen is quite a worthless money. It may be like if we called our currency “the Penny” instead of the dollar. So, a pip for the yen is actually the hundredth decimal place. So, if USD/JPY sits in 110.10 to 110.20, it has increased ten pips in value.

Pips are used in the foreign exchange market because the market is so liquid, and of course the volume that traders deal in is sometimes so large that a change of a hundredth of a cent tends to make a considerable difference in profit.

PIVOT POINTS

 Pivot points involve averaging high, low, and closing equity prices to detect new resistance and support levels. Day traders use pivot points usually alongside other data forecasting methods to distinguish price breakpoints triggered by high volume purchases and or revenue from a given stock. The foremost efficient way of calculating pivot points if you do don’t have expensive custom software, usually is to create an Excel formula based spreadsheet. While it wouldn’t give you streaming quotations, it beats the calculator on your Blackberry.

While no academic evidence supporting the accuracy of this method exists, industry professionals consider that the cyclical nature of the given valuation exhibits reoccurring patterns that can be predicted and calculated solely through charting its performance. Coincidentally, a professional blackjack player employs a very similar strategy. Since merely a finite level of possibilities exist, one can dramatically raise the chance of drawing favorable cards just by keeping in mind what high and low cards have already been dealt and based upon that information, make an informed guess at what cards within the deck are left.

RESISTANCE

A momentum indicator that indicates sharp indicator moves which is caused each time a new data point is added similar to how the past is dropped. The RSI is calculated as follows: RSI = 100 - (100/ (1 RS)); RS= \"X\" days' average of up closes/ \"X\" days' average of down closes

SUPPORT

A situation in which it is difficult for a currency pair's price gets caught. The value action at support generally stalls before breaking below or move within the other way. When markets are ranging, key support signals are utilized as sell or buy indicators. Support and resistance levels are gauged from the number of times a price arrived at a particular level.

Technical analysis (ta)

An investigative approach to foresee the market's price trends. Analysts may do this by analyzing price patterns, indicator signals, sentiment readings, open interest and volume..

TREND

Rates and prices' overall pattern of activity in the market.

A Forex trend is broadly known as the direction in which a currency pair is moving. Currencies usually do not rise straight up, nor do they fall vertically down. It really is more common for them to retrace a sample of their decline or advance, before continuing toward the original Forex trend. Each Forex trend, therefore, consist of a sequence of price thrusts in its direction and price reactions contrary to it ( which are also called retracements, corrections or pullbacks). Trends are differentiated by their direction and by their duration.

Currency trends are divided into three types according to their direction - uptrend, downtrend and sideways trend. Inside an uptrend each currency price thrust reaches a better level compared to the one before it and each currency price reaction stops for the level above the preceding reaction. In a downtrend every price thrust reaches a lower level compared to the thrust before it and each price reaction stops at the level lower than the last reaction. In a sideways market both price thrusts and price reactions don't substantially exceed their previous counterparts.

VOLUME

The quantity trade units of the security during a certain time. Verifying a change in trade units both the parties must be present in the transaction. Usually trade volume is measured either in by the hour, day or week. The quantity of trade units of the security during a certain time. Verifying a change in trade units both the parties needs to be included in the transaction. Usually trade volume is measured either in by the hour, day or week. Volume is definitely one of the most important indicators a trader can rely upon