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GlossaryPricing & settlement

Effective payout rate

Net profit as a percentage of stake after required charges. State whether the calculation excludes the returned stake.

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Direct answer

Where this term appears

Look for this term around the chart, strike or barrier controls, payout display, order confirmation, result history, or contract specification. The recorded value should be understandable before an order is confirmed.

Use the definition above together with the exact value, condition, timestamp, account, product, or payment context shown by the broker.

Do not confuse

How Effective payout rate differs from related terms

Effective payout rate is often researched beside Net profit and Refund rate and Payout rate. The labels can appear in the same workflow, but they do not describe the same field or condition.

01
Net profit

The amount gained on a winning contract after excluding the returned stake and applicable charges. It is not the same as gross return.

02
Refund rate

The percentage of stake returned when a contract ties, is voided, or qualifies for loss protection. Refund rules can change the effective result.

03
Payout rate

The percentage return displayed for a contract before confirmation, subject to product and account conditions.

Practical use

Read the number on one consistent basis

Effective payout rate means net profit as a percentage of stake after required charges. State whether the calculation excludes the returned stake. A numeric field is useful only when its unit, numerator, denominator, observation period, account scope, and exclusions are stated. Two brokers can display the same number while measuring different things.

A neutral example

Record the displayed value together with the asset or payment method, account tier, currency, product, timestamp, and condition. Recalculate the figure from the underlying amounts where possible.

01
Definition

The broker's formula, unit, scope, and included result states.

02
Observation

A dated screen or transaction record showing the value in its real context.

03
Normalization

The converted value on the same net, gross, per-trade, per-day, or per-method basis used for competitors.

In a broker review

How to use Effective payout rate in a comparison

Record whether the displayed percentage means net profit or gross return, then compare it with the loss treatment and any refund. This is the number used in break-even calculations.

Comparison context

Why it matters when comparing brokers

How to use this term

Pricing and settlement terms determine what the platform records, when the result is evaluated, and how the return is calculated. Small differences can change whether two displayed offers are genuinely comparable.

What it does not prove

A high displayed percentage or precise chart does not by itself establish a fair settlement process. The source, timestamp, quote side, cutoff, and exception rules still matter.

Broker checklist

What to verify

Check these points on the broker's product screen, account flow, terms, or help pages.

01
Displayed basis

Check whether the figure is gross return, net profit, refund, or another calculation.

02
Timestamp

Compare entry, cutoff, observation, and settlement times using the same time basis.

03
Price rule

Confirm whether bid, ask, midpoint, last price, or another quote determines the result.

04
Exceptions

Read tie, void, rejection, requote, outage, and correction rules.

Quick answers

Common questions

Short answers for users comparing binary options brokers and account conditions.

What is Effective payout rate commonly compared with?

Effective payout rate is commonly compared with Net profit. Net profit means: The amount gained on a winning contract after excluding the returned stake and applicable charges. It is not the same as gross return.

Why does this term matter when comparing brokers?

Pricing and settlement terms determine what the platform records, when the result is evaluated, and how the return is calculated. Small differences can change whether two displayed offers are genuinely comparable.

What should I check when comparing this feature?

A high displayed percentage or precise chart does not by itself establish a fair settlement process. The source, timestamp, quote side, cutoff, and exception rules still matter. Check the broker's definition, applicable terms, and account or product screen before relying on the label.