How Do Binary Options Work?

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A binary option asks a simple yes/no question:

Will this market be above this price at this time? 

If you think yes, you buy the binary option.

If you think no, you sell.

Either way, your price to buy or sell is between $0 and $100. Whatever you pay is your maximum risk. You can't lose any more.

Hold the option to expiration and if you're right, you get the full $100 and your profit is $100 minus your purchase price.

And with Nadex, you can exit before expiration to cut your losses or lock in the profits you already have.

That's pretty much how binary options work.