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Binaries Payout Concept
The payout ratio is the main profitability characteristic of a binary option. It determines the gain made by the client when a binary option matures In-the-Money. If the binary option matures In-the-Money, Dukascopy Bank returns the premium paid to the client account and additionally credits the account with the trading gain corresponding to the payout percentage multiplied by the premium.
The base payout ratio is always displayed on the trading platform before the start of an option contract. In case of discrepancy between the effective payout ratio communicated by Dukascopy Bank to the client and the payout ratio appearing on the platform, the payout ratio displayed on the platform is not relevant and cannot ground any claim of the clients for higher trading gains.
Dukascopy Bank reserves the right to customize the payout ratio, the maximum contract size and maximum exposure limits in function of each client, at its own discretion and without notice. Any change in the payout ratio applies to all binary option contracts opened after the change. There is no retroactive effect for the options which were already open at the time the payout percentage was changed. In case of pending orders, clients have the option to set conditions on the minimum acceptable payout ratio.
* Payout/Refund feature
Besides the standard base payout of 90% for Binary Options that does not assume any refund in case of forecast failure (i.e. option expiring Out-of-the-Money) Dukascopy Bank offers clients an option to select between predefined sets Payout/Refund combinations that best correspond to their individual risk tolerance. This means clients may select a lower-than-base payout ratio (lower than maximum) in exchange of a refund of part of the premium in case the contract expires with a loss.
The combination selected applies both to binary contracts opened immediately and to pending orders.
Dukascopy Bank may also adapt the payout ratio in function of groups of instruments at its own discretion. When the base payout ratio is modified, the change applies simultaneously to all instruments of this group.