Glossary of Terms

Binary Options, Forex, Crypto, ICO & IPO

  • Accord and Satisfaction 
  • A settlement agreement by which a claim is satisfied and discharged.
  • Action
  • A suit at law or in   equity. 
  • Actionable
  • Affording grounds for a   legal action. 
  • Adviser
  • A   professional, who is qualified to give you advice. Among others, this could   be an independent financial adviser (IFA), a whole-of-market mortgage   adviser, a solicitor or an accountant.
  • Affidavit
  • A statement sworn to or affirmed before an official who is authorized to administer oaths - usually a notary public
  • Agent
  • A person authorized by another, i.e., the principal, to act for him.
  • APR
  • Annual Percentage Rate. The figure next to this abbreviation shows you the total cost of taking out a loan, as a percentage, taking into account the term, interest rate and other costs.
  • Arbitration
  • The determination of a dispute by a disinterested third person, or persons, selected by the disputants.
  • Asset
  • Often called an underlying asset this refers to the type of item that you are trading on. This is the asset in which you are purchasing an option against. Examples of assets include: USD/GBP, USD/EUR, Gold, Silver, Google Inc, Apple Inc and many more.
  • At The Money
  • This term refers to the position in which the option is in when it expires neither in-the-money nor out-of-the-money but at the same price at which it was purchased (target price). In this situation there would be a neutral gain
  • Attorney-In-Fact
  • A person who is authorized by power of attorney to act for another.
  • Authorized firm
  • An authorized firm is one that has permission from the Financial Services Authority (FSA) to carry out regulated activities.
  • Balance Sheet
  • The balance sheet shows   the financial condition of a company at a specific point in time. The balance   sheet is broken down into the major sections: Assets, liabilities and net   worth. 
  • Bankruptcy Trustee
  • The person appointed by a   bankruptcy court to oversee either the running of a business in a   reorganization proceeding or the sale of assets and distribution of proceeds   in a business liquidation. 
  • Basic rate   taxpayers
  • You are a basic rate taxpayer   if you are earning below the higher tax rate threshold and are paying 20%   income tax for the tax year
  • Bequest
  • A gift of personal property by will.
  • Binary Options
  • Binary options, also known as digital options, or all-or-nothing options, are contracts which have only two possible outcomes - either they win, or they lose -- therefore binary by nature. A binary option involves a fixed payout after the underlying stock meets or exceeds its predetermined threshold or strike price. Values of binary options payouts are determined at the start of the contract and aren’t affected by the magnitude of movement of the stock value. Binary call options pay the predetermined amount providing the price of the underlying security exceeds the strike price at expiration. Similarly, binary put options pay the predetermined price if the price of the underlying security is trading at less than the option strike price at expiration.
  • Broker
  • A broker is someone or a company acting as an agent in where they make a contract between a trader and themselves in respects to purchasing options.
  • Certified Check 
  • A check drawn on the issuer's account but for funds that have been segregated by the bank, guaranteeing payment
  • Chose 
  • A claim or right to recover a debt or damages.
  • Commercial litigation
  • This is the use (or threat) of court proceedings by one business against another in relation to a dispute.
  • Commission
  • This is the payment that’s made to a financial adviser for services that he or she provides, based on a percentage of the value of the investment or premiums paid. It’s paid to the adviser by the product provider. If your adviser takes a commission, you may not need to pay any fees.
  • Commodities
  • This refers to one of the underlying asset types in which options can be purchased. A commodity is usually a physical item like Gold, Silver, Wheat and Cotton and the price of these is determined by economic factors.
  • Consideration
  • The required element in all contracts by which a legal right or promise is exchanged for the act or promise of another party. The inducement to a contract
  • Covenant
  • A promise made by one person to another
  • Cryptocurrency
  • Digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets.
  • Currency
  • A currency is an asset type that can be traded. Currencies are traded in pairs and common examples of these are: USD/GBP, USD/EUR, USD/CAD and many more.
  • CySec
  • Cyprus securities and exchange commission 
  • Damages
  • This is the amount of compensation that’s paid by a losing party to the winning party in a litigation case
  • Delivery
  • With respect to instruments, documents of title, chattel paper or certificated securities, means the voluntary transfer of possession
  • Deposit
  • In order to start trading you need to add funds to your trading account. This adding of funds is called a deposit. Different brokers offer varying minimum deposits anywhere from $100 up to around $500.
  • Dividends
  • These are payments that are made to shareholders by a company from any profits that the business has made.
  • Early Closure
  • Early closure is where a trader has the ability to close an option and immediately expire it ceasing the contract.
  • The Foreign Account Tax Compliance Act (FATCA) is a 2010 United States federal law requiring all non-U.S. foreign financial institutions (FFIs) to search  their records for customers with indicia of a connection to the U.S.,  including indications in records of birth or prior residency in the U.  S., or the like, and to report the assets and identities of such persons  to the U.S. Department of the Treasury. Usually, it 's connected to any payment and transfer of more than 10000 $ USD each.
  • FCA
  • The Financial Conduct Authority is the conduct regulator for 58000 financial services firms and financial markets in the UK
  • Fees
  • Fees are one of the ways you can pay your adviser for their advice and services. They’re usually fixed and agreed before the financial or legal advice and service is provided.
  • Forex(FX)
  • Global decentralized market for the trading of currencies. This market determines the foreign exchange rate.
  • FSA
  • The Financial Services Authority (the FSA) is the UK's financial services regulator.
  • Guarantee
  • To assume the liability   for such debts of another in the event of his default. 
  • Guaranty
  • A contract by which one   undertakes to be liable for the debt of another person in the event of his   default. 
  • Hedge fund
  • Hedge funds are a high risk   investment: they comprise a complicated set of strategies that aims to make   attractive returns on the stock markets.
  • Indemnity
  • Compensation paid for     damage or loss sustained or anticipated.
  • Indorsement
  • The signature of the     person transferring a negotiable instrument. 
  •  Insolvency
  • Condition of a person     who is unable to pay his debts as they fall due. 
  • Instrument (Financial Instrument)
  • Often referred to as Financial Instruments or Assets, it is another term which refers to the underlying Stocks, Commodities, Currency Pairs or Indices
  • Interest
  • When you give your money to a bank, to look after, you may receive an amount of money on top in return. That percentage is known as interest. You also have to pay interest on loans or mortgages when you borrow money.
  • Investment Amount
  • This is the amount of money that is invested when purchasing an option. Typical investment amounts can range from $1 up to $1000's and the amount at which you can invest in any single option is limited by the broker you are using.
  • ICO - Initial coin offering.
  • An initial coin offering (ICO) or initial currency offering, a type of crowdfunding using cryptocurrencies, is a means of raising capital that has been prone to scams and securities law violations.
  • IPO - Initial public offering.
  • Initial public offering (IPO) or stock market launch is a type of public offering in which shares of a company are sold to institutional investors and usually also retail (individual) investors; an IPO is underwritten by one or more investment banks, who also arrange for the shares to be listed on one or more stock exchanges.
  • Money laundering
  • The government has introduced tough money laundering laws in a bid to combat international crime and terrorism. This means that solicitors and other professionals need to check that you are who you say you are when you first instruct them. They may also ask for proof of identity if you have not instructed them for some time. Usually, identity is provided with a form of photographic document – such as your passport.
  • Negligence
  • The failure by a reasonable person to use sufficient care, diligence, and skill which he is required to use for the protection of others from injury or damage.
  • Out of The Money
  • This term refers to the point when a purchased option has no gain and the trader makes a loss on their investment. An option is out-of-the-money if you place a High (Call) option and the options price expires below the target price. If a Low (Put) option is placed then you are out-of-the-money when the options price expires above the target price.
  • Refund
  • A portion or the full amount of your investment you make is often refunded if your option expires 'at-the-money'. Some brokers may even refund you a portion of your investment on average around 15% if your option expires 'out-of-the-money'. Check each broker for refund options
  • ROI
  • Return on Investment
  • Solicitor
  • A professional who provides legal advice and services to individuals and businesses on a wide range of issues, for example divorce, conveyancing, contract law and employment law.
  • Stocks and Shares
  • Both terms mean the same thing: companies’ stocks and shares that can be bought and sold. Owning a share in a company means owning a part of that company, or owning some of that company's stock.
  • Withdrawal
  • After making successful investments it's time to take the money back out of your trading account, this comes in the form of a withdrawal. A withdrawal can take some time depending on the broker and also cost depending on which method you have chosen to withdraw your funds with.

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