What are Payout Rates in Binary Options?
As explained above, a return rate in binary options is the profit rate promised by the broker to traders. The payout rate always represents a certain percentage of the amount of money traders invested into their trading contract.
In case a trader will correctly predict the outcome of a trading contract, then he or she will receive the initial investment back as well as the promised percentage of the initial investment based on the payout rate. Consider the below example to better understand this:
– A broker allows you bet on the fact that Microsoft’s stocks will be either above or below $100 by today 20:00
– The broker promises a payout rate of 80%
– The trader decided to predict that the stocks will be above $100 and invests a sum of $100
In case the trader will accurately predict the outcome of the contract mentioned above, then he or she will be rewarded with a total sum of $180. From this sum $100 represents the initial investment and the $80 represents the profit based on the payout rate of 80%.
So basically the return rate represents the profit rate promised by the broker to traders on successful trades. The return rate indicates the profit rate a trader could achieve by correctly predicting a trading contract.
How are profit percentages calculated?
Financial spread betting return percentages are usually established by the broker in advance. The general rule is that the easier an option can be predicted the lower the payout rate will be. On the other hand, the harder the outcome of an option can be predicted, the larger the profit rate is.
The average payout rate in the financial trading business is around 85% at this moment. However, this average is expected to become 95% in the near future. As such, we don’t even list brokers on our website that offer payout rates lower than 85%. Anyone offering payouts lower than this is below average.
Best Binary Options Return Rates
As hinted above, the average profit rate offered in the financial trading business at this moment is 85%. This means that with trades of $100 traders can in average generate revenues of $180. However, this rate is expected to become around 95% in the near future.
Like explained above, the profit rate of a binary option usually also depends on the difficulty of the option. The movement of commodities is usually easier to predict and as such contracts involving commodities offer lower payouts. Forex pairs are a bit harder to predict and as such, they offer better return percentages.
The payout rates of binary options also depend on the type of the binary option. This is because some binary contract types are easier to understand and to predict than others. Here too, easier options have lower winning rates and more difficult contracts have higher return rates.
High/low option return percentages
High/low contract types are the simplest contracts available. These contracts only require traders to predict if the value of an asset will increase or decrease during a certain time frame. As such, they offer the lowest payout rates in the options trading business.
The most common high/low contracts offer payout percentages between 65% and 95%. High/low options usually never offer payout rates above 100%. They might pay out less than other types of contracts but they are easier to predict ensuring a higher success ratio. – As such, they are recommended to newcomers.
One-touch options payout rates
One-touch contract types are a bit more complicated to predict than high/low options. In this trading type traders will have the task to predict if the value of an asset will reach a certain pre-established value during a certain time frame.
One-touch binary option return percentages are usually in the 100%-200% range. As such, they are recommended to intermediate to expert traders. Experienced traders will be able to achieve very high success percentage with one touch-options that in turn will allow them to profit form the high payout rates.
Boundary options payout rates
Boundary contracts are the most complicated trading contract types in the business. This is because contracts of this kind will have two strikes. Traders win or lose depending on the fact if the value of an underlying asset will reach one of the two strike lines during a certain time frame.
Due to the fact that these options can be predicted harder than other contract types, they offer very high return ratio. Payout rates of 200% to 500% are not infrequent in the case of range contract types. However, these options are only recommended to expert traders.
60 seconds contracts payout percentages
60 seconds contracts are simple high/low contracts with expiry times of just 60 seconds. The fact that they are simple high/low contracts ensures that most traders can easily predict them. However, they aren’t as easy as normal high/low options because of their very short expiry time.
Because they are a bit more difficult to predict than normal high/low contracts, they offer higher payout rates. Return ratios of 100% to 150% are considered normal when it comes to 60 seconds trading contracts.
Binary Options Brokers with the Best Payouts Rates
If you have read everything above, then by now you’ll know everything about payout rates in binary options trading. Now it’s time to find out everything about the binary options brokers that offer the best payout rates. You should only register at a broker that offers very high Return ratios.
Like explained above, the current average payment rates in the financial spread betting business are at around 85%. You should not register at a broker that has payout rates lower than this rate. The binary options brokers with the highest payout rates always offer percentages of at least 85%.
Likewise, it’s also important to check if the broker offers high return ratios individually in case of all the different options types. A payout rate of around 85% is above average in case of high/low options. In case of other option types, payout rates of above 100% and 200% are normal.
The binary options brokers we’ve listed on this page and overall in all of our pages of our website offer a minimum payment rate of 85%. In order words, they don’t just offer an average payout rate of 85% but instead this is the minimum offered value by them.
They of course also offer above average services in all aspects other than the payout rate. Check out these brokers in case you want to register and receive very high return percentages. Also, read our additional educational articles to learn to become a winning trader.