The estimated returns a trader will receive if their deal expires in the money are known as a binary options payout (i.e., they correctly estimate an underlying asset’s price value).
Binary options payout in a nutshell
- Payout percentages are usually between 60 % and 95 %.
- Options with shorter expiration times generally have higher payout ratios.
- The payout ratios are usually lower for options with more volatile underlyings.
- Payout Ratio Reality: Brokers advertise higher payout rates, but the actual payouts can differ.
Example: How does a Binary Options payout work?
In binary options, the payout is predetermined based on whether the option expires “in the money” or “out of the money.” If it expires in the money, the trader receives a fixed payout. Payouts have always been a matter of gossip in Binary Options. These payouts or returns are vital for traders and investors to succeed in their careers. That is why choosing the best binary options payout is one of the most important tasks in the whole process.
There are different payout options every aspiring trader and investor gets. Each option depends on several things. Before joining any brokerage, you must choose the best payout option.
Assuming you decide to trade binary options on the price of gold.
Outcome 1
Every binary options trade offers you a commission on every trade you make. For example, if you are investing $100 for a trade and the commission profit is 86%, you will receive your invested amount ($100) plus the commission amount ($86) as the total amount.
$100 (your initial investment) + $86 (86% of your initial capital) = $186
Outcome 2
However, if your prediction is wrong and the price does not rise as expected, you will lose your entire initial investment of $100.
How to find the best Binary Options payouts?
Finding the best binary options payout is a tough task you need to do to make more profits. Here is what you can do:
- Identify the assets that you have traded frequently
- Choose your favorite expiry time and option type
- Compare the different payouts of those particular combinations of asset, expiry, and trade type.
- Repeat the whole process when needed
The base payout ratio is always shown on the trading platform before the start of an option contract.
Usually, brokers mention payout percentages in their headlines that are not fulfilled, actually. For example, a broker may promise you to offer a 90% payout on your trades, but when you sign up for it and make a trade, you get to know that the payout is only 70%.
Below, you see a list of the binary options brokers with the highest payouts:
- Pocket Option – The best binary options broker with high payouts
- Quotex – Up to 98% return on every investment
- Expert Option – Binary options brokers with high payouts
- Deriv.com – Payouts of up to 100%
- Olymp Trade – Easy-to-use platform
To be aware of all these things, traders should practice on Binary Options demo accounts.
How ti find the Binary Options broker with the highest payouts?
To get the best binary options payout, traders must identify the assets they want to deal in. And after that, they can compare different binary brokers based on their features, payouts, and services.
This process must be repeated regularly, and if traders get to know about any new broker with better offers and deals, they should explore the opportunity.
One must understand that comparing exchange-traded and over-the-counter brokers is very difficult. So, if you need to compare these two, be careful. Have a look at the definition of over-the-counter brokers to gain more knowledge.
What factors influence the payout?
The payout will depend on several factors, such as the trading style, assets traded, the broker’s payout structure, and the specific option type (e.g., high/low, one-touch). Higher volatility and longer expiration times often lead to higher potential payouts due to increased risk.
