> For the complete documentation index, see [llms.txt](https://legacydocs.lighter.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://legacydocs.lighter.xyz/trading/binary-options.md).

# Binary Options

Binary options on Lighter are markets with two possible outcomes. Each market asks a single question with a fixed end time, for example "Will the BTC price at 14:15 UTC be at least the BTC price at 14:00 UTC?", and settles to one of the two answers once that time has passed.

The first binary options on Lighter are **Up/Down** markets on crypto prices. Each series covers one asset and one window length (for example BTC, 15 minutes), and a new market opens for every window of the series.

### How it works

* Every market has one order book. Prices are quoted in USDC between `0.01` and `0.99` and are the price of one **Up** share.
* An Up share pays **1 USDC** if the market settles Up and **0** otherwise. A Down share pays the opposite.
* The price of a share can be read as the market's implied probability of that outcome: an Up price of `0.62` implies a 62% chance of Up and costs `0.38` for the Down side.
* Positions are fully collateralized in USDC. There is no leverage, no funding and no liquidation: the most you can lose on a position is what you paid for it.
* You can close a position at any time while the market is open by trading the other side, or hold it until settlement.

### Up/Down markets

<table data-search="false"><thead><tr><th>Item</th><th>Description</th></tr></thead><tbody><tr><td>Underlying</td><td>Crypto price, for example BTC or ETH</td></tr><tr><td>Price source</td><td>Chainlink Data Streams</td></tr><tr><td>Window</td><td>The series duration, for example 15 minutes. Its start and end define the question.</td></tr><tr><td>Start price</td><td>Underlying price at the start of the window</td></tr><tr><td>Settlement price</td><td>Underlying price at the end of the window</td></tr><tr><td>Outcome</td><td><strong>Up</strong> if the settlement price is greater than or equal to the start price, <strong>Down</strong> otherwise</td></tr><tr><td>Payout</td><td>1 USDC per winning share, paid in USDC to your account</td></tr><tr><td>Market symbol</td><td><code>&#x3C;ASSET>-UPDOWN-&#x3C;DURATION>-&#x3C;WINDOW START></code>, for example <code>BTC-UPDOWN-15M-1792168200</code> (window start in Unix seconds)</td></tr></tbody></table>

Markets of a series are listed ahead of time, so you can trade a window before it starts. Trading stops at the end of the window, and the market settles shortly after.

### In this section

* [Fee Structure](/trading/binary-options/fee-structure.md): how trading fees are charged on binary options and how they are discounted.
* [Discovering and Trading Markets](/trading/binary-options/discovering-and-trading-markets.md): how to find markets, read their state and trade them.