Description of Binary Options trading

A binary option trader is basically a trader purchasing the right to buy a particular underlying asset and sell it. The buy and sell options are pre-agreed before entering the contract for a stipulated period of time. What makes this transaction binary is the fact that the trade basically has only two outcomes. The trader can earn a very high return on making a correct prediction or lose his or her investment. This is the main reason why trading in Binary Options is a high yield investment and a high risk investment at the same time.