What Are Binary Options?

Binary options are a type of financial derivative where the payoff is either a fixed amount or nothing. They are called “binary” because there are only two possible outcomes: a profitable payoff or nothing. Traders predict whether the price of an asset, such as a stock, currency, or commodity, will be above or below a specific price at a specific time. If the trader’s prediction is correct, they receive a predetermined payout. If incorrect, they lose the initial investment.

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