This page is part of the Wikinvest Guide to Options. Related articles within this guide include:
Binary Options are options that pay either a fixed amount or nothing at all upon expiration. The payoff of a binary option depends on whether or not the option is in-the-money when it expires. As such, binary options still carry a strike price, but it is only used to determine whether or not the option pays out at expiration and not the amount that it pays out. There are two popular types of binary options: cash-or-nothing options and asset-or-nothing options. With a cash-or-nothing option the holder is paid a fixed amount of money if the option is in-the-money upon expiration. An asset-or-nothing option pays the holder the value of the underlying asset if the option expires in-the-money.
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