It is indeed very important to know the nature of a certain investment or any ventures that involve money and assets before engaging with it. Like with binary options, a lot of people are doing transactions with it although they only know a little about it. For a more clear understanding, binary option is actually like a gamble, you either win or lose. To win or receive payoff from binary options, you first have to purchase using your money or any of your valuable asset. You are going to purchase a stock that has a maturity date. When you purchased a stock that struck at $100 and the payoff $1000, you will only receive the payoff which amounts to $1000 if the stock trading is at least $100 when the maturity date comes. If ever the stock trading has lowered down from $99, you will receive nothing at all. So, don't be ignorant. Know the details of your venture before engaging further.