What is an asset? In financial terms an asset represents the actual item that is traded on the global financial market. It can be a commodity, an index, stock or a currency. While a broker is very used to these financial terms, an amateur trader will find them confusing at the first glance; therefore we will try to explain them a little bit.
When capital for operational development is needed, a company issues shares that are bought by investors. The traders buy and sell shares of different companies and make profit if the value of the shares increases. In binary options the trader doesn’t need to invest a lot of money to buy the actual assets, he/she just need to make prediction over the evolution of the asset price.
Some types of stocks: Microsoft, British Petroleum, Vodafone, Facebook, Apple, Google, etc.
On the world market, private and state institutions and economic brokers trade various items that are valuable for the economy: oil, gas, precious metals, cereals, etc.
In the binary options trading, the same options are applied on the bets that the traders make.
Commodities that are traded (examples): oil, gas, precious metals, cereals, etc.
A group of individual assets form together an index. This is a powerful asset, more stable during a period of time, although during past years we have also seen huge turns in indices values of the market.
Indices examples: IBEX 35, Dow Jones, FTS 100, DAX 30, Nasdaq Composite.
On all the international markets national currencies are traded with each other, in pairs. The situation of a national currency depends on the economic situation and evolution of that specific country. While on the traditional market, governmental institutions and private traders and institutions trade currency pairs, in binary options trading, traders make financial bets based on the predictions of the currency evolution.
Here are the examples of the currency pairs that are commonly traded on the world markets: USD/CAD, AUD/USD, EUR/GBP, EUR/JPY, GBP/JPY, NZD/USD, EUR/USD, USD/GBP, USD/JPY.