Binary options are a simple way to trade price fluctuations in multiple global markets, but a trader needs to understand the risks and rewards of these often-misunderstood instruments. Binary options are different from traditional options. If traded, one will find these options have different payouts, fees and risks, not to mention an entirely different liquidity structure and investment process.
( For related reading, see: A Guide To Trading Binary Options In The U.S.)Binary options traded outside the U.S. are also typically structured differently than binaries available on U.S. exchanges. The cash-or-nothing binary option pays some fixed amount ooptions cash if the option expires in-the-money while the asset-or-nothing pays the value of the underlying security.