Binary options trading is a type of financial product where the parties involved in the transaction are assigned one of two outcomes based on whether the option expires in the money. Binary options have an expiry date and/or time, and at the time of expiry, the price of the underlying asset must be on the correct side of the strike price (based on the trade taken) for the trader to make a profit. Binary options are priced between $0 and $100, so traders can decide how much capital they can risk. If the trader is correct, they receive a payout per the terms agreed, but if they are wrong, they lose their entire investment in the trade. Binary options dont allow traders to take a position in the underlying security, and most binary options trading occurs outside the United States. Binary options trading is often compared to gambling, and the industry is rife with scams, so its important to trade through a company thats regulated by the U.S. Commodity Futures Trading Commission or the National Futures Association. The largest regulated binary options broker in the U.S. is Nadex.