- Number of messages : 44
Points : 2287
Date of Entry : 2015-05-25
Year : 31
Fri May 29, 2015 2:58 pm
“Up/Down” or "Call/Put" binary contracts
The only thing that determines the possible gains with Call/Put binaries is the price at the expiration time of the option contract.
In case of a correct forecast, the option is In-the-money and the trader receives back the paid premium plus an amount equal to the applicable payout ratio (between 70% and 90%) multiplied by the premium amount.
In case the forecast of the trader was erroneous, that is the market price at the time of the option's expiration is lower than the strike of the Up/Call option (or higher for the Down/Put), the contract is Out-of-the-money. In this case there is no gain for the trader and they lose the premium paid.
Usually, the gains paid for in-the-money trades depend upon the underlying traded and the yield (payout ratio) that the broker is willing to offer.
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