Binary Options Trading is when a buyer enters into a contract to purchase an underlying asset at a fixed price at a pre-determined time in the future. The owner does not buy the asset itself, rather the option to buy it. The fixed price at which the owner buys or sells at, is known as the strike price.

In binary option trading, the potential gain or loss is known at the onset of the contract and it is determined by the amount invested by the owner. So, there are only two possible outcomes: or the option expires in-the-money and the owner receives a 65-71% payout; or the option expires out-of-the-money and the owner receives nothing. However, if binary option trading is carried out with anyoption™, an owner receives a 15% payback if his option expires out-of-the-money.

There are 3 aspects to the trade: the underlying asset, the expiry time and the direction the asset will move in.