Binary option

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Binary option

An option where the payoff is a fixed amount of an asset or nothing at all.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Binary Option

An option contract in which the payoff is some set price or nothing. For example, suppose the strike price on a binary option is $100 and the payoff is $250. If the underlying asset is above $100 when the option is exercised, one receives $250. Otherwise, one does not receive anything. A binary option is also called an all-or-nothing option. See also: Exotic option.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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