A binary option, also known as a digital option or an all-or-nothing option, is one in which the trader has to decide between two positions: the value of an asset will go up or down over a period of time? Depending on whether the operator is correct or not, the payout is a fixed price or anything.
For example, if an operator takes a position that the value of gold increases in a given period of time, and it is correct, s / he wins a fixed payment. If the value of gold goes down, however, the trader loses the entire amount of the investment. It does not matter if the asset exceed the original price, the exercise price of $ 1 or $ 100, the payoff is the same.