In the trading markets, a binary option is defined as a trading mechanism where the payoff is a fixed amount of your investment. You speculate and bid on a specific asset and determine whether it will rise or fall in an exact period of time. When you purchase a binary, the potential return is certain and you know what you will make or lose before the actual purchase. You can trade on just about any financial product or commodity by buying a call or up option or a put or down option. The beauty of binary option trading is you do not trade on a fixed price but only on the option that an asset will raise or fall.
