Deciding your position and learning how a contract price is determined

thoroughly calculate the current market conditions surrounding your chosen asset and determine whether the price is more likely to rise or fall. If your insight is correct, on the expiration date, your payoff is the settlement value of your contract. The return rate on each winning trade is decided upon by the broker and this amount is always made known upfront. The price of a Binary Options contract is roughly equal to the market's perception of the probability of the event happening. For example, if a contract has a settlement value of $200 and the last trade of the contract was $192.00, it is an indicator that approximately 96% of the market believes that the event is going to happen and the contract will end up in-the-money.