Binary options are very different to the more traditional way of trading options in a number of ways. The choice you have with a options contract is dependant only on whether the asset will increase or decrease in price over a set timeframe. For example if the current stock price of XY Company is $9.32 at 3pm on a certain day then the trader must decide if that particular stock will be higher or lower than $9.32 at 4pm on that day. Once the trader has acquired the contract with their decision there is no more choices the trader can or needs to make. With binary options the trader is not purchasing any stock within the company just trading on its movement. Once the contract has expired the trader will receive either a pre-determined amount subject to a successful trade or they will lose their investment if their prediction ends up being incorrect. Returns on investment are typically around 80%. Due to the “all or nothing” structure this type of trading is sometimes called “fixed return options”. A trading account can be opened for around $250 and trades can be carried out for a minimum of $25 depending on broker.