Question about Option types.

D

doggyfx

Hello,

I am absolutely new in option trading, hence a lot of questions have been risen up since my first exposure to it. One of the most interesting, the difference of payouts amount. I have registered with Optiontrade broker, make deposit and stumbled upon very interesting thing: you can trade with fixed bet (100$ for example) but receive different payouts - from 75% to 560%. As I understand a deposit has to be in direct ratio with expected profit. But why there is so crazy difference in profitability of each trading type?
If there is something I am totally missing?
 
doggyfx said:
Hello,

I am absolutely new in option trading, hence a lot of questions have been risen up since my first exposure to it. One of the most interesting, the difference of payouts amount. I have registered with Optiontrade broker, make deposit and stumbled upon very interesting thing: you can trade with fixed bet (100$ for example) but receive different payouts - from 75% to 560%. As I understand a deposit has to be in direct ratio with expected profit. But why there is so crazy difference in profitability of each trading type?
If there is something I am totally missing?
More...

What about the likelihood of the outcome?

In roulette, whether you bet on 13 or you bet on black: you can bet the same amount of money but your payouts are vastly different.
 
Thanks for the answer. But how % of expectancy may vary if I make forecast on the same economic feature (price drop or spike)? Still can't catch it...
 
doggyfx said:
Thanks for the answer. But how % of expectancy may vary if I make forecast on the same economic feature (price drop or spike)? Still can't catch it...
More...

Because the prices are based on what the market thinks. The market has a view of the world that makes the options have zero expected value. You can have a different view which means you think they have a positive expected value. Each option will have different "leverage" to your view (based on delta and convexity).
 
I also had the same question, I think it's the characteristic of each trading type, and more difficult come with greater payout.
 
Just made a huge loss in Forex and want to switch to Option trading, can anyone share me some experiences in trading binary?
 
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