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Before we look at the upside of binary options let's take a look at the downside. Exotic option investing is not traditional investing. Some say it is very similar to gambling. I like the red/black roulette wheel analogy. When you acquire a binary option contract it will either win or lose at some point in time, depending upon the expiration time of the deal. Many of the option brokers now promote 60 second contracts. A fair assessment would be to call such a contract an investment/gambling hybrid. In fact, it could be argued that any Wall Street investment is really nothing more than an elaborate gambling scheme. Unlike traditional option deals, where each contract controls a certain number of shares, there is no leverage with binary options. With this type of option you cannot exercise the options. Thus you have no right to the underlying asset. The option is strictly used to generate income for the holder.
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