Common comparison error
A familiar Binary option name cannot replace a win, loss, refund, missing-price, and Asset or nothing option payoff table.
GlossaryProducts & contracts
Binary option
A fixed-outcome contract that settles according to a stated condition at expiry or during the contract period.
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
How to verify Binary option
Read Binary option together with Forex binary option, Asset-or-nothing option, At-expiration digital option. The comparison must preserve the exact rule, value, state, and evidence described below.
A neutral example
Binary option marketing is rewritten as a payoff table covering win, loss, equality, unavailable price, observation, returned stake, and distinction from Forex binary option. The evidence must resolve the defining Binary option boundary: the accepted condition creates a fixed outcome at expiry or during a defined observation window.
Evidence path
Where to verify Binary option
Use the source that governs the exact contract, account, entity, or platform state. A general definition cannot replace current broker terms.