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http://togetherweearn.com/profiles/blogs/stock-market-jackpot-softw... Binary contracts are, like the name implies, bi-polar. Either you choose the "up" side of the switch, or the "down" side. You might think of it similar to any two-sided choice - yes or no, true or false, heads or tails, on or off. In this case the binary switch refers to up or down movements in a stock, currency, or index.How it works is that you, or I, or any investor with a binary options trading account picks one of the available securities to trade (not all securities are traded... only the highest volume securities are traded this way) and selects how much to invest. Once the amount to invest is selected the investor must choose which direction the security will go, up (choosing "call") or down (choosing "put"). The trading software computes the payouts (also fixed based on the contract) and if satisfied with the contact, the investor submits the order.
The really fascinating part about this sort of transaction is that it does not matter how much the stock moves... the only thing that matters is the direction. The payout at the end of the contract is the same whether the security jumps a nickel or twenty dollars. If the binary options trading contract is for a 75% payout on an up movement of a security on a $100 investment and the stock is up even just one cent at the expiration of the option, the investor receives $175 ($100 invested plus $75 profit). Options expire typically Stock Market JackPot hourly so a successful trader can execute many contracts every day.
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