What are binary options and how do they differ from traditional trading?

Recently, I have come across several advertisement concerning binary options, and it raised my interest. Some days back, one of my friends attempted to trade on them, and without wasting anytime, he earned some profits. However, I still make no sense in the whole binary options business. A few years back, I had the misfortune of attempting to invest in the stock market, and it was quite a wild experience! It was crazily volatile, and I was quite stressed because of the unpredictability. So, how are binary options treated considering they do not qualify to be stock exchange trading?