Dukascopy gives binary options traders, in every trade, the right to select between predefined sets of Payout/Refund combinations. Combinations alternatives are : 90%/0% , 85%/5% , 80%/10% , 75%/15% , and 70%/20%.
For some traders it is puzzling. Traders may ask: which ratio is better to choose? Is it just a matter of personal preference and risk tolerance? Do all ratios have the same profit potential in the long run? If no, which ratio is more profitable? In this article we will try to answer these questions and help binary options traders to make a clear and intelligible choice.
P.S. If at any time you feel that you don't like the math details, you can directly jump to the article conclusion.
What are Dukascopy payout / refund ratios?
Binary options payout ratio (90%, 85%, 80%, 75%, and 70%) refers to the percentage of your initial investment amount you will win if your prediction turns out to be correct and your option expires "in the money".
Whereas the binary options refund ratio, also known as "Return on loss" (0%, 5%, 10%, 15%, and 20%) refers to the percentage of your initial investment that you recover even if you traded in the wrong direction. You can get this partial…