Binary Returns

Binary Options Trading Industry
binary options brokers have some of the highest returns in the industry. With average payouts (returns) of 70% – 80%, how can you go wrong? Some brokers even claim to payout up to 200%, while others may only return around 50% – 60%. Why is this and how do binary options brokers calculate their returns on investment? To fully understand where your profits are coming from and how they are calculated, continue to read the following article.

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What Is a Return?

When trading binary options, the return on your investment is a certain percentage of money invested by a trader on a binary options trading contract. So, if the trading contract is successful, the trader receives their money in which was invested, plus a certain payout percentage of the money invested.

How Is a Return Calculated?
Why don’t binary options brokers all have the same payout? The returns they payout can range from as low as 50% to as high as 200%. To further understand this, we must learn how these returns are calculated.

Binary options returns don’t just differ from broker to broker, but within the brokerage itself. The payouts for each trade are predetermined based on how easy or hard the option outcome can be predicted. For instance, if the outcome of the option is easily predicted, the payout rate will be lower. On the other hand, if the option is more difficult to predict, the payout rate will be higher.

An example of this would be the market movement of commodities and forex. The outcome of trading commodity contracts is much easier to predict than the trading of forex. Which means commodity options have a lower payout, while forex options can have a relatively high payout.

Binary Contracts
Another factor influencing the return rate is the type of binary option. Some binary contracts are easier to understand and predict than others, hence having a lower payout rate and vice versa for more difficult binary contracts.

High/Low
High/low contract types are the simplest contracts available, hence offering the greatest rate of success. The contracts require a trader to predict whether the value of an asset will increase of decrease during a certain time frame. Generally, these contracts offer payouts between 65% – 95%.

One-Touch

One-touch contract types are more difficult to predict as the trader must predict whether or not the value of an asset will reach a predetermined value during a certain time frame. This type of binary contract is recommended for intermediate to advanced traders as it is much more difficult to succeed. Payouts generally range anywhere from 100% – 200%.

Boundary
Boundary contracts offer the highest returns ranging from 200% – 500%, as they are the most complicated contract in binary options trading. Contracts of this kind have two strike zones. By this I mean, the trader can either win if the price reaches a certain point in a certain time frame, or they can also lose if the price meets a certain point in the opposite direction during that same time frame.

60 Seconds
These contracts are the same as high/low contracts except for the fact they must be completed within 60 seconds. For this reason, there is added difficulty, thus receiving average payouts between 100% -150%.