What Is a Binary Option and Why Are They Often Controversial?
A binary option is a derivative where the payoff is either a fixed amount or nothing at all, depending on whether a specific event (like the price being above a strike price) occurs by expiration. They are controversial because they are often associated with predatory trading practices and lack transparency, leading to bans or severe restrictions in many major financial jurisdictions.
Glossar
Predatory Trading Practices
Exploitation ⎊ Predatory trading practices within cryptocurrency, options, and derivatives markets represent opportunistic behaviors leveraging informational or structural advantages to detrimentally impact less-informed participants.
Binary Option
Option ⎊ A binary option is a type of exotic derivative contract characterized by a discontinuous, all-or-nothing payout structure at expiration.