What is a binary option?

A binary option is a trading instrument of the financial market (an option with fixed income). When working with this trading instrument, a trader determines the trend of prices and makes profit in the event that his/her forecast works well. In the event that the trader’s forecast is wrong, he/she loses the bid. The name of this type of options is due to the nature of their trading process. Since trading such options is to make the bids for raising or lowering the asset price, they are called “binary” which means dual or represented by two types of elements. Generally, various currency pairs, stocks, indices, cryptocurrencies and commodities are used as assets, i.e. all kinds of trading instruments.

To trade the binary options, a trader has to be able to correctly predict the trend of asset prices, i.e. it is necessary to determine whether this price will increase or fall in a certain period of time. Here successful work of a trader depends on the correct decision and direction selection using the CALL or PUT buttons. These buttons are a kind of control panel and, with their help, a trader can participate in bidding. As for the expiration of the binary option and its expiration date, it can vary from a minute to one year.

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