Binary options payout refers to the percentage of the amount you will win if your prediction turns out to be correct for a particular option.
It is represented in terms of percentage and hence your profit increases as you increase the amount you invested. For example, suppose the payout for a particular option is 75% and you make an investment of $100. If your prediction regarding that option happens to be right after the expiry of the option, you will make a profit of 75% of $100 i.e. $75.
After the expiry, your profit along with the amount you invested will be added to your trading account. In this case a total of $175 will be added likewise. The payouts are clearly defined before you make a trade. Hence, you would always know how much you stand to win in a trade.
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Variation in binary options payouts
Binary options payouts are variable. Different options have different payouts depending on the asset and the binary options broker. For the same asset a binary options broker may offer a different payout as compared to any other broker. Payouts also depend on the type of trading like 60 seconds, boundary trading, one touch etc.
Some binary options brokers offer a bit lower payouts in general. They may offer other amazing features but as a regular binary options trader you should always try to subscribe to a broker which offer high payouts as the payouts play a role in every trade you make.
Payouts also vary due to the likelihood of outcomes. Suppose due to a particular news update about a company, the company’s shares are expected to grow. In this case the more binary options traders will like to trade the Up or High option. Since the number of traders trading Up option would be significantly higher than those trading Down, the binary options brokers offer a lower payout for High option and a higher payout for the Low option so that the brokers themselves do not run into a loss.
The payouts depend on the type of trading as well. Since it is very difficult to apply any strategy in 60 seconds options due to the extremely small time frame, the payouts are the high in this segment. You can get up to 90% returns in 60 seconds options. The payouts for High or Low and Boundary options are a bit low as compared to the 60 seconds options. Some brokers offer up to 85% payout on some of the assets in these trading modes as well.
One Touch trading has the highest payout which can go up to 700%. But it is an entirely different concept of trading with very different terms and conditions. So do not get swayed away just by seeing the payout. But there is no denying fact that the payouts in this segment can be as high as 700% and if you get one correct you will make a big profit.
Payouts determine the amount you win if your prediction is correct. Subscribing to a broker which offers high payouts will help you make more money with every trade you win.