The Expiry Level of a trade is the rate or price at which an asset expires. The terms ‘Expiry Rate’ and ‘Expiry Price’ depict the same thing can equally be used.
When trading binary options, an option on a certain asset is always opened and closed at a specific market rate. The Expiry Level therefore designates the market rate at which the trade expires at the end of the predetermined time frame.
The level at which a binary options position expires will determine whether the trade is In The Money, Out Of The Money, or At The Money – depending on whether the trader has placed a Call or Put option.
There are three scenarios for the outcome of an option: ‘At The Money’ (meaning that the position is null) ‘In The Money’ (meaning the trader has made a profit on top of the initial investment), and ‘Out Of The Money’ (meaning that the investment has been lost).
For example, if a trader places a Call trade and it ends In The Money, this means that the Expiry Level is higher than the strike rate – conversely, if it ends Out Of The Money, this means that it was lower than the strike rate.
Definition of “Expiry Time”