# Binary Option

*Derivatives & Options — Finicade finance glossary*

An all-or-nothing option: it pays a fixed amount if a condition is met at expiry, and zero otherwise. Simple to describe, but its knife-edge payoff is notoriously hard to hedge near the strike.

**Also known as:** binary option, digital option, digital

**Related terms:** [Exotic Option](https://finicade.com/glossary/exotic-options), [Option](https://finicade.com/glossary/option), [Moneyness](https://finicade.com/glossary/moneyness)

**Taught in:** Hull Street — Exotic Options

Source: https://finicade.com/glossary/binary-options