Discount broker commodity trading
For example, if you buy foreign currency and you want to limit your losses, you can buy an ordinary option. Companies and pension funds routinely buy tens of millions of dollars in options to limit their loses as insurance. That way if you own a binary option, it's a pure bet, you win or you lose.
Because there is no economic reason to buy a binary option other than to gamble and because you can't hedge risk, the big banks stay away from binary options, which allows a lot of little players to come in. Since I'm a former quant who used to work at big bank, this is what I think about binary options 1) You are gambling.