Forex options are becoming more and more popular nowadays among Forex traders as an additional tool for short-term speculations which are based on technical events. Although binaries are still young and suffer from liquidity and hence high premiums, Swing-Traders, Scalpers and Day Traders find the predetermined risk-reward ratio (~70% on trades that are "In the Money", and 10% on trades that are "Out of the Money",) extremely productive.
 

Illustration of a binary option at StartOptions.com

For example, on 17/02/2010 the FOMC Meeting Minutes failed to generate enough volume for the EURUSD to create a sustaining rally. As the image illustrates, eventually a pullback at 20:00 GMT to the event level at 19:00 GMT of 1.36167 would have left you with no gains and lost on the spread. Had you traded a Binary Option you would have made $70.
 

Here is how:

• At the time of the event you place a Put Binary Option trade on StartOptions.com. The cost of the trade is $100, returning $170 if the price ends below 1.36167 or $10 if the price ends above, It’s that simple.
   
• Since the price returned almost back to the breakout level, I made $170 on my Binary Option trade, whereas I would have made $0 and even paid for the spread had I traded the EURUSD directly.
  

So, basically what the Binary Option offers me is a way to profit on weak events, so I can target many more events. Otherwise we have to wait for GDP or other big news or patterns that generate sustaining breakouts.

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