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GlossaryProducts & contracts

Binary option

A fixed-outcome contract that settles according to a stated condition at expiry or during the contract period.

Binary options glossary definition visual
Direct answer

Where this term appears

This term usually appears in a product selector, order ticket, contract specification, or settlement explanation. Read the full rule instead of inferring the contract from its marketing name.

Use the definition above together with the exact value, condition, timestamp, account, product, or payment context shown by the broker.

Do not confuse

How Binary option differs from related terms

Binary option is often researched beside Forex binary option and At-expiration digital option and One-touch option. The labels can appear in the same workflow, but they do not describe the same field or condition.

01
Forex binary option

A fixed-outcome contract referenced to a currency pair, with settlement determined by the broker's stated expiry and price source.

02
At-expiration digital option

A fixed-payout digital contract decided by whether its condition is satisfied at the stated expiry time.

03
One-touch option

A barrier-style contract that settles successfully if price reaches the stated target before expiry.

Detailed explanation

How Binary option works in practice

01
Mechanics

The holder does not buy the underlying asset. The contract normally settles automatically to a predefined cash amount or zero according to one stated event. Audit the sequence from submission and server acceptance through entry reference, observation, expiry, final price, result, and cash credit.

02
Worked example

For a 100-unit stake and 80% net payout, a successful result returns 180 units including the stake; a full-loss result loses 100 units. With no refund or fee, break-even is 55.56%. Above, below, exactly equal, void, and corrected outcomes must each have a written rule.

03
Decision rule

Do not shortlist the product unless the condition, payout basis, equality rule, expiry timestamp, settlement source, correction policy, operating entity, and account jurisdiction are documented.

Practical use

Build a timeline instead of relying on a countdown label

Binary option means a fixed-outcome contract that settles according to a stated condition at expiry or during the contract period. Timing terms can refer to client submission, server acceptance, entry tick, order cutoff, observation start, expiry, settlement, or market session. Each event needs a timestamp and timezone.

A neutral example

Record all available events in UTC, calculate acceptance latency, accepted duration, and settlement lag, then note daylight-saving, holiday, weekend, maintenance, and event-window effects.

01
Clock basis

Timer or fixed clock, timezone, daylight-saving rule, and start event.

02
Event chain

Submission, acceptance, entry, cutoff, expiry, and settlement timestamps.

03
Schedule

Asset session, holiday calendar, interruption, and restart policy.

In a broker review

How to use Binary option in a comparison

In a broker review, do not read Binary option in isolation. Match the broker's own definition to the relevant contract, account, pricing, payment, or platform screen and record the condition that changes its meaning.

Comparison context

Why it matters when comparing brokers

How to use this term

Product labels can look similar while using different settlement rules. Identify the exact condition, strike or barrier logic, observation period, expiry method, and stated payout before comparing one broker with another.

What it does not prove

A familiar product name does not prove that two brokers offer the same contract. Platforms can use different definitions, price references, expiry cutoffs, and tie rules.

Broker checklist

What to verify

Check these points on the broker's product screen, account flow, terms, or help pages.

01
Contract rule

Confirm the precise winning, losing, tie, and void conditions.

02
Price reference

Identify the quote source and price used at entry and settlement.

03
Time control

Check the observation window, expiry method, and order cutoff.

04
Displayed return

Compare the ordinary payout and any condition attached to a headline maximum.

Quick answers

Common questions

Short answers for users comparing binary options brokers and account conditions.

What is Binary option commonly compared with?

Binary option is commonly compared with Forex binary option. Forex binary option means: A fixed-outcome contract referenced to a currency pair, with settlement determined by the broker's stated expiry and price source.

Why does this term matter when comparing brokers?

Product labels can look similar while using different settlement rules. Identify the exact condition, strike or barrier logic, observation period, expiry method, and stated payout before comparing one broker with another.

What should I check when comparing this feature?

A familiar product name does not prove that two brokers offer the same contract. Platforms can use different definitions, price references, expiry cutoffs, and tie rules. Check the broker's definition, applicable terms, and account or product screen before relying on the label.