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What's the difference between Forex trading and trading binary options. The difference between a binary option and a regular option is that a regular option has a smooth function and a binary option has a step. If you have a smooth function, then you can buy or sell stock to balance the price of the option and reduce your risk to zero. If you own a call option (see below) then when the option is high, you short sell one share of stock and that balances any change in the option price.
When the option is low, you hold zero stock and that balances the option price.