From Binary Options Wiki
When investing in commodity options you entering into contracts that give you right, but not the obligation to the movement of a commodity stock in the market. This means that, instead of buying stocks outright and falling victim to the either profitable or non-profitable price outcome of it, you are simply predicting the movement of the commodity and whether it will rise or fall.
The losses and gains are clear from the onset and you will only ever lose your original premium, whether the movement in stock is big or small.
Popular and well known commodity options include gold, oil, copper and coal. Commodities are raw or primary products, for which there is a constant supply and demand for across the market, this very much determining their price and making is easier to trade against each other based on current affairs.
I.e. a major oil leak in the sea would affect the price of petrol compared to an international boom for the demand of gold.