Simple - Binary Options are basically a prediction that the markets will move above or below a specified target price. For more information, as well as haters and critical opinions please refer to my old thread here
http://www.blackhatworld.com/blackhat-seo/making-money/693192-me-winning-binary-options.html
I no longer trade on the platforms in that thread (they started screwing people over) but I now use http://www.Nadex.com They're a regulated exchange who has no interest in whether you win or lose