I’ve done extensive research into regular option and binary options trading being haram or halal.
The short answer after my research is: Binary Options Trading is HARAM.
Why? In Binary Options trading, there is no underlying asset which is traded or dealt upon. In each deal you’re simply betting that the stock price will be above or below a certain price after a given time period. If you’re right, you walk away with profits, however if you’re wrong, your “investment” has gone to zero. This is pure gambling with a mask on it.
Compare this to real business which is halal. In a halal investment, there is some form of service/trade done.
An easier way of thinking about this is as follows:
1) If someone invests $5 Trillion into Binary Options for Apple Stock, the actual Apple company is completely unaffected. Hence showing Binary Options have no underlying asset which is traded/dealt. Therefore this is haram gambling and not investing.
Now compare this to halal business:
2) What happens when you invest in a halal company’s stock? You’re betting the company will go up in value BUT in this case, there’s an actual underlying company, so this will classify as doing trade/business. Which means this is halal.
EVERY business consists betting/gambling because you’re betting that you’ll make money. Even with halal businesses, you invest/start a business betting you’ll make money. You have to look deeper to what’s under the surface to judge whether the ‘betting’ is halal or haram.
I’m simply human and prone to making mistakes, may Allah forgive all our sins as we may not even know we’re sinning. We can only put in the effort to stay on the straight path.