Binary Options Glossary — 100+ Terms Explained
This glossary defines every term you'll encounter while trading binary options on Quotex. Each definition is written in plain language with practical context for Quotex users. Use the table of contents below to jump…
A-C: ATR, Binary Option, Bollinger Bands, Call, Candle
Foundational terms that appear frequently in our strategy guides and platform documentation. Master these before progressing to more advanced terminology.
| Term | Definition | Context on Quotex |
|---|---|---|
| ATR (Average True Range) | Volatility indicator measuring average price range over N periods | Used for position sizing and expiry selection. See /indicators/atr/. |
| Asian Session | Trading hours during Tokyo market open (00:00-08:00 UTC) | Lower volatility on most pairs; best for JPY pairs. |
| Asset | Tradable instrument: forex pair, crypto, commodity, index, stock | Quotex offers 400+ assets across categories. See /assets/. |
| Binary Option | Fixed-payout contract predicting price direction over fixed time | Win = payout (typically 75-95%); lose = full stake. |
| Bollinger Bands | Volatility indicator: SMA + ±2 standard deviation bands | See /indicators/bollinger-bands/. |
| BTC/USD | Bitcoin priced in US dollars; most-traded cryptocurrency pair | See /assets/btc/. |
| Call | Bet that price will be HIGHER at expiry than entry | Click green up-arrow button on Quotex. |
| Candle (Candlestick) | Single time-period price representation showing open, close, high, low | Foundation of technical analysis. See /education/technical-analysis/. |
| CFA | Chartered Financial Analyst — professional credential held by our senior reviewer | Anna Petrov, CFA reviews all our content. |
D-F: Demo, Digital Option, EMA, Expiry, FOMC, Forex
| Term | Definition | Context |
|---|---|---|
| Day Trade | Position opened and closed same trading day | All binary options are day trades by definition. |
| Demo Account | Virtual-funds practice account with same features as live | Quotex demo starts with $10,000 virtual. See /demo/. |
| Deposit | Funds added to your trading account | Minimum $10 on most methods. See /deposit/. |
| Digital Option | Variable-payout version of binary option based on strike distance | Quotex offers binary and digital. See /games/. |
| Divergence | Indicator and price move in opposite directions (e.g., RSI vs price) | Strongest reversal signal. See /indicators/rsi/. |
| EMA (Exponential Moving Average) | Moving average weighting recent prices more heavily | See /indicators/ema/. |
| EUR/USD | Euro vs US Dollar; most-traded forex pair globally | See /assets/eur-usd/. |
| Expectancy | Average win per trade across many trades | Win Rate × Avg Win − Loss Rate × Avg Loss. Must be positive. |
| Expiry | Time at which binary option settles win or loss | Quotex offers 5 sec to 4 hour expiries. |
| FOMC | Federal Open Market Committee — sets US interest rates | Decisions cause extreme USD volatility. Avoid trading. |
| Forex | Foreign exchange — currency pair trading | Largest asset category on Quotex. See /assets/forex/. |
G-L: Gharar, Halal, Indicator, KYC, Long, Lot
| Term | Definition | Context |
|---|---|---|
| Gharar | Islamic finance concept: excessive uncertainty, prohibited under Sharia | Reason most scholars consider binary options haram. See /quotex-pakistan/halal/. |
| Halal | Permissible under Islamic law | Binary options generally NOT halal per most scholars. |
| Haram | Forbidden under Islamic law | Mainstream scholarly view on binary options. |
| Hedge | Position taken to offset risk in another position | Limited applicability on binary options (no positions to hedge). |
| Indicator | Mathematical calculation applied to price data for analysis | 100+ available on Quotex. See /indicators/. |
| KYC | Know Your Customer — identity verification process | Required before first withdrawal. See /signup/. |
| Leverage | Multiplier on position size; not applicable to binary options | Binary options have fixed max loss equal to stake. |
| Long | Bet on price rising; equivalent to Call in binary options | Most beginners default to long bias. |
| Lot Size | Standard unit of currency for spot forex; not used in binary options | Binary options use stake amount instead. |
M-O: MACD, Martingale, Maysir, Momentum, NFP, OTC
| Term | Definition | Context |
|---|---|---|
| MACD | Moving Average Convergence Divergence — trend/momentum indicator | See /indicators/macd/. |
| Margin | Collateral for leveraged positions; not used in binary options | Binary max loss = stake; no margin call possible. |
| Martingale | Strategy of doubling stake after each loss | Math doesn't work at 85% payout. See /strategies/martingale/. |
| Maysir | Islamic finance concept: gambling, prohibited under Sharia | Reason binary options are considered haram. |
| Mean Reversion | Strategy assuming price returns to average | Works in ranging markets. See Bollinger Bands strategies. |
| Momentum | Speed of recent price changes | Measured by RSI, MACD, Stochastic. See /indicators/. |
| Moving Average | Average price over N periods, recalculated each period | Foundation of EMA, SMA, MACD. |
| NFP | Non-Farm Payrolls — US monthly jobs report; first Friday of month | Causes extreme USD volatility. Stop trading USD pairs. |
| NY Session | New York trading hours (13:00-22:00 UTC) | Most volume of any session for most assets. |
| OTC | Over-the-Counter — synthetic 24/7 versions of forex pairs | Higher payouts. See /assets/otc/. |
| Overbought | RSI/Stochastic above 70/80 — recent moves up may reverse | Don't trade against strong trend. |
| Oversold | RSI/Stochastic below 30/20 — recent moves down may reverse | Don't trade against strong trend. |
P-R: Pip, PUT, Payout, RSI, Risk, ROI
| Term | Definition | Context |
|---|---|---|
| Payout | Percentage of stake returned on winning binary trade | Quotex: 75-98% depending on asset and hour. |
| Pip | Smallest typical price move in forex (0.0001 for EUR/USD) | Used to measure price moves and volatility. |
| PIX | Brazilian instant payment system | Most popular Quotex deposit method in Brazil. See /quotex-brazil/. |
| Position Sizing | How much capital to risk on each trade | Standard: 1-2% of balance per trade. Critical for survival. |
| PUT | Bet that price will be LOWER at expiry than entry | Click red down-arrow button on Quotex. |
| Range | Period where price oscillates between support and resistance | Mean-reversion strategies work; trend strategies fail. |
| Resistance | Price level that historically halted upward moves | Where sellers tend to appear. |
| RSI (Relative Strength Index) | Momentum oscillator 0-100, overbought >70, oversold <30 | Most popular indicator. See /indicators/rsi/. |
| Risk Management | Practices to preserve capital across many trades | Position sizing + daily loss limits + emotional discipline. See /education/risk-management/. |
| ROI | Return on Investment — net profit as percentage of total invested | Realistic positive ROI for skilled binary traders: 5-15% per month, NOT 50-100%. |
S-Z: Spread, Stochastic, Strategy, Support, Trade, Volatility, Wick
| Term | Definition | Context |
|---|---|---|
| Scalping | Very short-term trades (seconds to few minutes) | Possible on Quotex Quick Deals (5s-60s expiries). |
| SEBI | Securities and Exchange Board of India — Indian regulator | Does not license binary options brokers. See /quotex-india/. |
| Sharia | Islamic religious law | Governs halal/haram trading decisions for Muslim traders. |
| Signal | Indicator or pattern suggesting trade entry | We do NOT recommend paid signals services. |
| Spread | Difference between bid and ask price | On Quotex binary options, the 'spread' is reflected in payout percentage (under 100%). |
| Stake | Amount risked on a single binary option | Max loss = stake; win returns stake + payout. |
| Stochastic Oscillator | Momentum indicator comparing close to recent range | See /indicators/stochastic/. |
| Strategy | Defined rules for entering and exiting trades | See /strategies/ for our complete strategy library. |
| Support | Price level that historically halted downward moves | Where buyers tend to appear. |
| Swap | Overnight rollover fee on spot forex; not applicable to binary options | Binary options have fixed expiry; no overnight holding. |
| Technical Analysis | Studying price charts to predict future moves | See /education/technical-analysis/. |
| Trend | Sustained directional price movement | Up trend = higher highs and higher lows; down trend = lower highs and lower lows. |
| UPI | Unified Payments Interface — Indian instant payment system | Most popular Quotex deposit method in India. See /quotex-india/. |
| Volatility | Magnitude of recent price changes | Measured by ATR or Bollinger Width. |
| Volume | Number of shares/contracts traded in a period | Confirms strength of price moves. |
| Whipsaw | Sharp reversal that triggers stop-out then continues original direction | Common in choppy markets; minimized by larger expiries. |
| Wick (Tail) | Thin line on candle showing high/low beyond open/close | Long wicks signal price rejection. See pin bar strategy. |
| Withdrawal | Funds removed from trading account back to your payment method | Requires KYC first. See /withdrawal/. |
| XAU/USD | Gold priced in US dollars; most-traded commodity | See /assets/gold/. |
Frequently Asked Questions
Why does this glossary include religious terms like Halal and Gharar?
Many of our readers are Muslim traders evaluating whether binary options are permissible under Sharia law. Including these terms in our glossary makes that information accessible alongside other technical terminology. We document the mainstream scholarly view honestly — see /quotex-pakistan/halal/ and /quotex-india/halal/ for detailed analysis.
Are all these terms used on Quotex specifically?
Most are general binary options or trading terms applicable across all platforms. We've added Quotex-specific notes where the platform implements something distinctively (e.g., Quick Deal expiries, OTC pair availability, KYC process). If you trade other binary options platforms, almost all definitions transfer directly.
Why is no minimum deposit listed in the glossary?
Minimum deposits change with promotional periods and country-specific rules. Rather than listing a number that may go out of date, we link to /deposit/ for current minimums (typically $10 equivalent, but varies).
Why don't you list 'Stop Loss' for binary options?
Stop loss is a spot/CFD concept where positions can be partially exited. Binary options have fixed expiry — you cannot 'stop out' a binary mid-trade. The closest equivalent is position sizing (only risk what you can afford to lose on that single trade). See /education/risk-management/.
What's the difference between 'overbought' and 'oversold' in practice?
Overbought (RSI >70, Stochastic >80) means recent price moves up have been strong — a pullback or reversal is more likely than continued rapid rise. Oversold is the mirror (RSI <30, Stochastic <20) — recent declines may pause or reverse. Neither is a direct entry signal — confirm with candle patterns or support/resistance.
Where can I learn the math behind these terms in detail?
Each indicator term links to a dedicated page (e.g., /indicators/rsi/) with the full mathematical formula, default settings, signal interpretation, and worked examples. The glossary provides quick reference; the indicator pages provide depth.
Ready to start trading on Quotex?
Start Trading on Quotex →
Disclosure: Sign-up links on this page may earn us a commission at no extra cost to you. This does not affect the editorial accuracy of our content — payouts, methods, and platform features are reported as observed.