A: A Binary Option is a $100 contract between traders where the Buyer takes the position that a certain strike price will be exceeded at the time the contract expires, and the Seller takes the position that it will not. Thus, Binary Options are all-or-nothing options with a fixed payout of either $100 or $0, depending on the final value of the underlying asset. These contracts enable you to profit from short-term market movements and various economic events.

A: Binary Options are based on an underlying asset (such as oil or gold). Each Binary Option is defined by:

Underlying	An asset (e.g. oil, gold).
Strike Price	The value that defines who wins and who loses.
Last Trade Date	The day the contract will stop trading on the Exchange.
Expiration	The date on which the value of the underlying asset is judged against the strike price to determine payoff.
Payoff	All or nothing - $100 or $0.

Here is an example of a Binary Option based on the price of Crude Oil: Crude Oil > $95.00 (31 Mar 08). The details of this contract are:

Underlying	Price of Crude Oil
Strike Price	> $95.00
Last Trade Date	March 31, 2008
Expiration	March 31, 2008
Payoff	All or nothing - $100 or $0.

A: Since each Binary Option is structured in the same manner, it is easy to figure out the details of each contract. Here is an example of a Binary Option based on the price of Crude Oil:

Crude Oil > $95.00 (31 Mar 08)

The details of this Binary Option contract are:

Underlying	Price of Crude Oil
Strike Price	> $95.00
Last Trade Date	March 31, 2008
Expiration	March 31, 2008
Payoff	All or nothing - $100 or $0.

Additionally, you can view more information on the underlying asset and the specific Binary Option by visiting the particular contract's Contract Details page, which is accessible under the Trade tab.

A: It's easy to take a position on the degree and direction of price movements using Binary Options. With Binary Options, you simply buy if you believe the market price will rise, or sell if you think the opposite. If your insight is correct on the expiration date, you make $100.

For example, consider the following Binary Option: Crude Oil > $95.00 (31 Mar 08). To take a position on the price of Crude Oil, you would:

• Buy if you think the price of Crude Oil will be greater than $95.00 on March 31, 2008.
• Sell if you think the price of Crude Oil will be less than or equal to $95.00 on March 31, 2008.

On March 31, 2008, if the price of Crude Oil is greater than $95.00, the Buyer makes $100; if the price of Crude Oil is equal to or less than $95.00, the Seller makes $100.

A: There are many advantages to trading Binary Options, including:

• Small size: $0 - $100 contracts
• Low risk: you know your potential gain or loss in advance
• Short Term Daily Expirations

A: HedgeStreet currently offers Binary Options related to currencies and commodities.

A: To learn more about Binary Options, you can visit the Discover Binary Options section. For more information on trading Binary Options, please refer to the Trade FAQ in this Help section of our website.