A binary option is a type of option with a hard and fast payout during which you are expecting the result from two possible results. If your prediction is correct, you receive the agreed payout. If not, you lose your initial stake, and more. It's called 'binary' because there are often only two outcomes - win or lose.

Binary options trading is a financial instrument where traders can bet on whether the price of an asset will increase or decrease by a predetermined time and date. It's an easy way to trade such assets as stocks, commodities, currencies, and indices without having to deal with the complexities of the underlying market.

Binary options trading is a financial derivative that provides a simplified approach to traditional trading on various financial markets. In binary options, traders speculate on the price movement of underlying assets such as currencies, commodities, stocks, or indices within a predetermined time frame. The key feature of binary options is the binary outcome – a trade either ends in-the-money (profitable) if the prediction is correct, or out-of-the-money (loss) if the prediction is wrong.

Traders choose a specific asset, predict whether its price will rise or fall, and select a designated expiration time for the trade. This simplicity distinguishes binary options from traditional trading methods, as investors don't need to worry about the magnitude of price movements, only the direction. Binary options offer fixed returns, allowing traders to know their potential profit or loss before initiating a trade.

While binary options can be appealing due to their straightforward nature and quick potential returns, they also carry inherent risks. The binary outcome structure means that a single incorrect prediction results in a complete loss of the invested amount. Regulatory scrutiny and concerns about fraudulent practices within the binary options industry underscore the importance of caution and thorough research for those considering participation in this form of trading.