Glossary term
Binary Option (Prediction Market Context)
A contract paying a fixed amount ($1) if an event occurs and nothing if it does not; the structural form of all prediction-market contracts.
A Binary Option in the prediction-market context is a contract that pays a fixed amount — typically $1 — if a specified event occurs and $0 if it does not. Because the payout is fixed, the contract's price between $0 and $1 maps directly to an implied probability. This binary structure is the building block of every prediction-market contract on Kalshi, Polymarket, and similar venues. See Prediction Markets 101.