What the numbers mean
A fixed-time trade returns a set percentage of your stake if you are right and keeps the whole stake if you are wrong. Since the payout is under 100%, each win is worth less than each loss.
So the number to watch is the break-even win rate: the share of trades you must win just to end at zero. Below it, the average trade loses money, however good a single day feels.
The maths
- Profit on a win = stake × payout
- Loss on a losing trade = stake
- Break-even win rate = 1 ÷ (1 + payout)
- Average result per trade = win rate × profit − (1 − win rate) × stake
Worked example
Stake $10 at a 85% payout: a win brings $8.50, a loss costs $10. You must win 54.1% of trades to stay level. At a 50% win rate the average trade loses -$0.75, so 100 trades cost roughly -$75.00.
Quick answers
How is the profit on a binary option worked out?
Multiply the stake by the payout percentage. A 10 stake at 85% returns 8.50 profit plus the 10 stake on a win; a loss costs the full 10.
What win rate makes binary options profitable?
Anything above 1 ÷ (1 + payout): about 54.1% at an 85% payout and 55.6% at 80%. Winning half your trades always loses money when the payout is under 100%.
Do higher payouts make it profitable?
They lower the break-even win rate, but never below 50%. Payouts also move with the asset and the hour, so use the figure on the trade ticket.