Starting your trading journey on Stockity can feel exciting—and a bit confusing if you’re new to digital options. Like any industry, trading has its own language filled with terms and jargon that might seem overwhelming at first. But don’t worry! Understanding these key trading terms will help you feel more confident and make smarter decisions.
In this article, we’ll cover the essential Stockity trading terms every beginner must know to get you started on the right foot.
- Asset
An asset is what you trade on Stockity. It can be a currency pair (like EUR/USD), a cryptocurrency (such as Bitcoin), a stock, or a commodity (like gold). The goal is to predict whether the price of the asset will go up or down within a set time frame.
- Digital Option
A digital option is a type of trade where you bet on the price movement of an asset. Unlike traditional trading, digital options have a fixed payout and fixed risk. You either win a pre-set profit or lose your initial investment based on whether your prediction was correct.
- Expiry Time
The expiry time is the duration of your trade. It could be as short as 30 seconds or as long as several minutes or hours, depending on the platform’s options. At the expiry time, the trade closes automatically, and you find out if you won or lost.
- Strike Price
The strike price is the price of the asset at the moment you open your trade. Your success depends on where the price is relative to this strike price when the trade expires.
- Payout
The payout is the amount of money you can earn if your prediction is correct. Stockity usually shows payout percentages (e.g., 80%), which means if you invest $10 and win, you get $18 back—your $10 investment plus $8 profit.
- Investment Amount
This is the amount of money you decide to put into a single trade. Beginners should start with small investment amounts to minimize risk.
- Call and Put
- Call option: Predicting the price will go up.
- Put option: Predicting the price will go down.
On Stockity, these are usually simplified as UP and DOWN buttons.
- In the Money (ITM)
If your prediction is correct when the trade expires, your option is considered in the money. You get your payout plus your original investment.
- Out of the Money (OTM)
If your prediction is wrong, your option is out of the money—meaning you lose the money you invested in that trade.
- At the Money (ATM)
Sometimes, the asset’s price at expiry is exactly equal to the strike price. This situation is called at the money. Depending on the platform’s rules, you may get your investment back or the trade might be considered a loss.
- Volatility
Volatility measures how much an asset’s price moves up or down within a certain period. Higher volatility means bigger price swings, which can mean higher risk but also bigger potential profits.
- Demo Account
A demo account lets you practice trading with virtual money before risking real funds. Stockity provides a demo account so beginners can learn how to trade and test strategies safely.
- Risk Management
This term refers to the techniques and rules traders use to protect their capital. It includes setting limits on how much to invest per trade and when to stop trading after losses.
- Broker
A broker is the company or platform that facilitates trading between you and the financial markets. Stockity acts as your broker, providing the tools, assets, and interface for trading digital options.
- Liquidity
Liquidity means how easily an asset can be bought or sold without affecting its price. Highly liquid assets (like major currency pairs) tend to have more stable prices and tighter spreads.
Final Thoughts
Learning these key terms will help you navigate Stockity with more confidence. The trading world has its own language, but with a little practice, these words will become second nature.
Before trading with real money, spend time on Stockity’s demo account to get comfortable with these concepts. The more you understand, the better your chances of trading smart and managing your risks effectively.
If you’d like, I can help create a glossary or flashcards to help you memorize these terms—just ask!
