In many respects, regular options and binary options are similar and there is only one major difference. These are based on a system where maximum loss and profit is known by the trader beforehand. It is this feature of these options that makes it easier for people to calculate the risk and reward associated with them before making a trade. They are also known as all-for-nothing or digital options. These options are regarded as an easy form of investment, especially for novices. Banks looking to hedge their interest rate and currency risks and investors following financial trends in the market are keen to invest in binary options.
