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Any aspiring binary option trader is concerned about the success of his trading and this brings us to the issue of being able to compare pay-outs. It is necessary to calculate pay-outs before signing up with a particular broker. The calculations to determine the best pay-out for binary options may not be as straightforward as always. Fortunately, almost all broker lists will contain a pay-out listed in percentages.
Calculating pay-out rates
For instance if we say that the stake winning position is 80% and we invested $10, 000, in case the trade is called off the pay-out is $10000+(80% of $10000)=$1800 in our favour. In our case the highest binary option is $18,000. Obviously the best payment will be seen in your structure within most cases and used in the market. Most trading options make an offer of 60% to 80% of payment rates. It is possible to come across options offering lower pay-out rates than these. In case of bankruptcy, a trading agency may allow traders to get a portion of the fund invested.
The cash refunded back by the traders is always low compared to that invested. In case a trader takes the option of not being given back the refund it affects the base pay-out rates. If complete pay-out option is taken then the following differences are seen:
Refund: 70% pay-out within a 15% refund contingency in an 85% profit trade.
Complete Option: 85% pay-out within a 0% refund contingency in an 85% option.
Finding the best option pay-out
Traders have noted with a lot of concern that a headline percentage in a certain listing may not always apply in every asset you want to trade in after an expiry period. When, trading, the first step for a trader is to map out a trading plan. Determining what asset plans are likely to be traded is key, their frequency of trading and their expiry periods. Once these facts are known, it becomes easier to compare binary options in this area.
A majority brokers specialize in a certain asset class of commodities or currencies to trade in. This is the source of differentiated pay-outs. The firm with the highest rated pay-out for the GBP/JPY forex market may also therefore have the lowest pay-out when it comes to a binary option for the gold market. A demo account is a useful tool to conduct simulations and verify the pay outs with new and alternative brokers.
The above broker comparison is a process that needs to be repeated continuously to ascertain that rates are the same. Brokers adjust pay-outs as served with information indicating risks and volume in trading. In summary, finding the best paying binary option is a simple process involving the following steps:
• Identify a class of frequently traded assets
• Determine the expiry time for an asset and the option type
• Compare the pay-outs offered for a combination of assets
• Iterate the process a number of times to ensure how fool proof it is
This process illustrates that the title of the “highest broker pay-out” is not the same for every person. The pay-out is dependent on trading styles, assets being traded and expiry periods.