In their simplest form, binary options can go only one of two directions, as the name implies.
Meaning, right off the bat you have a 50% chance of winning.
They are an all or nothing type of trade and there is no middle ground. This might sound threatening, but they really are quite easy to understand.
1) You select an asset and then predict whether you think that asset will go up or down in price.
2) Once you choose the direction on the asset, the broker that you are working with will display the percentage amount that you will have returned to you prior to officially committing your money to the trade.
3) You then select the amount that you want to trade and the timeframe with which you want to work within.
4) Once these basic factors are all accounted for, you will click on the button that executes the trade.
One of the benefits of binary options is that you have more information about how the trade will conclude, more than with any other type of trading. You know exactly how much you stand to earn and exactly at when that money will be added to your account. With binaries all this information is shown to you prior to your commitment.