Binary options per se are not banned in America, but you have to have proper regulatory approval. The companies running binary options gambling operations would

Binary options per se are not banned in America, but you have to have proper regulatory approval. The companies running binary options gambling operations wouldn't be able to meet the approval requirements, because usually those companies don't actually match buyers and sellers directly, so they manipulate the prices more like a bookmaking operation than a financial market. There is a market that is regulated by the Commodity Futures Trading Commission that only has binary options, but they don't take positions in their own market and meet other regulatory requirements. They even offer binary options on events (Fed funds rate movement, for example) so it acts as a prediction market of sorts. Whether it actually provides a net benefit to the world aside from gambling is very much in question though. I find it hard to believe that people are using their binary options for hedging.