when buying binary options here are the steps 
you should be mindful of the potential risk of fraud when trading binary options it should be noted that many binary options platforms operate outside regulated financial markets this lack of regulation can lead to a higher risk of fraud since there s no oversight 11 when the fraud occurs you ll often be very much on your own you must conduct thorough research verify the broker s regulatory status and approach binary options trading with caution fully understanding the risks and the potential for fraud example of a binary optionone example entails that the binary option s entry price indicates the potential profit or loss with all options expiring worth 100 or 0 the assumption is that stock colgate palmolive cl is trading at 64 75 a binary option has a strike price of 65 and expires tomorrow at noon the trader can buy the option for 40 if the price of the stock finishes above 65 the option expires in the money and is worth 100 the trader makes 60 100 40 if the option expires and the price of the colgate is below 65 out of the money the trader loses the 40 they put into the option the potential profit and loss combined always equals 100 with a the binary option if the trader wanted to make a more significant investment they could change the number of options traded for example selecting three contracts in this case would up the risk to 120 and increase the profit potential to 180 