The binary options trading system is designed to both simplify the investment outcomes and shorten the investment time horizon. How it achieves this is by fixing both elements rather than permitting open ended results. Consider the standard options trading system - how while it does offer a fixed expiration of the contracts, it does not fix the payout outcomes. There is great potential for gain or loss over time for the standard option holder. Likewise for the writer of a standard contract - while the maximum profit for a trade is fixed, the loss is variable (and in the case of call writing the loss can be infinite).
Some traders would prefer a more simple options trading system, and that is where a binary options trading system can fill that void. Binary trades involve only the most highly liquid securities such as the Nasdaq index, Google common stock, US Dollar/Yen exchange rates, and the like. Trades are executed with a set strike price and only carry value based on the direction of movement of the underlying stock, not the size of that movement. What does this mean? Let's look at an example trade:
A $200, 75% payout 12:00pm expiration binary call option on Google with strike price $307.50/share will pay $350.00 if Google goes up as of 12:00pm, $30.00 if Google goes down. It does not matter if the underlying share price goes up 10 cents or 10 dollars, the payout is the same. Likewise if share price falls one dollar or one cent, the payout will be $30.00.