Binary options are a type of financial derivative where the payoff is either a fixed amount or nothing at all, based on whether the underlying asset’s price meets a specific condition at expiration. The outcome is strictly binary, resulting in a win or a loss for the trader. These instruments are known for their all-or-nothing nature.
Context
The discussion surrounding binary options in the crypto space often involves regulatory scrutiny due to their speculative nature and potential for high risk. While some platforms offer them as a trading instrument, concerns persist regarding investor protection and market manipulation. The prevalence of binary options trading can indicate specific market behaviors and the appetite for high-risk, short-term trading strategies.
Hyperliquid's Event Perpetuals establish a novel primitive for binary prediction markets, leveraging market-driven pricing and single-point resolution to address the limitations of continuous oracle-dependent derivatives.
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