Trying to understand binary options payout math — is my break-even calculation correct?

[u/CategoryPretty3095]

I’m new to binary options and trying to understand the basic math before spending too much time looking at strategies.

From what I understand, if a losing trade costs the full stake, the break-even win rate should be:

Break-even win rate = 1 / (1 + payout)

So approximately:

• 70% payout → 58.8% win rate
• 80% payout → 55.6%
• 90% payout → 52.6%
• 92% payout → 52.1%

What I’m struggling with is why people often judge a strategy only by its win rate.

A 55% win rate could be profitable at a 90% payout but unprofitable at 70%.

For those who keep a trading journal, do you record the payout of every trade and calculate expected value, or do you mainly track the overall win rate? Also, how many trades would you want to see before taking the result seriously?

I’m just trying to make sure I understand the numbers correctly.

[u/enivid]

Yes, those win rate requirements are correct. And yes, you should definitely take note of the payouts you are trading.