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GlossaryStrategy & risk

Affordability

Whether an amount can be lost without borrowing, missing essential expenses, or creating financial hardship. A low minimum deposit does not establish affordability.

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Do not confuse

Common comparison error

A low minimum deposit or small first stake does not establish affordability; the relevant amount is the total planned and simultaneous loss exposure measured against essential expenses and available cash.

Practical use

How to verify Affordability

Read Affordability together with Expected value, Backtest, Break-even win rate. The comparison must preserve the exact rule, value, state, and evidence described below.

A neutral example

A user sets aside 100 units from discretionary cash, then tests whether losing the full deposit plus every open stake would still leave rent, debt payments, food, and the emergency reserve untouched. If any essential obligation would be displaced or borrowing would be needed, the amount is not affordable.

Evidence path

Where to verify Affordability

Use the source that governs the exact contract, account, entity, or platform state. A general definition cannot replace current broker terms.

Written calculation and full sampleState payout, loss treatment, assumptions, exclusions, stake path, cumulative exposure, stop rule, and uncertainty.
CFTC binary options resourcesUse regulator material as product-risk context, not as validation of a strategy or broker.Open source