A binary contract has only two possible outcomes, YES or NO, and pays exactly $1.00 to holders of the winning side at resolution.
Understanding binary option / contract helps you read prices and manage risk on any prediction market platform.
Example
If you buy a YES contract at 55¢ and it resolves YES, you receive $1.00, a 45¢ profit per share.
Why it matters
Knowing how binary option / contract works lets you compare markets and avoid costly mistakes when trading.
Practical tip
Before trading, check how binary option / contract shows up on the specific platform you use, since interfaces and terminology can vary slightly between exchanges. Reviewing a few live markets is a quick way to see binary option / contract in action before risking real funds.