Binary option - is an option, with two possible outcomes of trading: profit or complete loss. At the time of buying an option, the trader makes a prediction (in other words, a bet) on how the price of the asset will change: fall or rise. If the prediction is correct, then the option will bring profit, and if not, then, accordingly, the loss.
Investing your capital in binary options trading requires strategies that have been developed in advance. Professional traders seek to develop strategies to maximize the likelihood of success and the level of profitability, while minimizing potential losses and the likelihood of those losses.
Binary option is one of the simplest types of exotic options. The owner of a binary option receives a fixed payoff if the price of the underlying asset is below or above a certain point at the time of expiry (or before) and receives no payout at all in all other cases.
Trading binary options is a relatively recent phenomenon and represents an opportunity for those who love to invest and speculate on the stock markets, but at the same time carries huge risks for the trader. However, the concept of binary options has actually existed for several decades.