Educational
Trading vocabulary, the mathematics behind risk and reward, and the technology traders use — without hype.
Taking a position on how the price of an asset will move, with the goal of profiting from that movement.
Deriv offers this through options contracts, CFDs and its own synthetic indices.
A contract with a fixed stake and payout, resolved at a set expiry.
Leveraged contracts tracking an asset's price, with no fixed expiry.
| Term | Definition |
|---|---|
| Stake | The amount you put into a single trade. |
| Payout | What you receive if the trade's condition is met. |
| Expiry | When a contract's outcome is settled. |
| Profit / Loss | The difference between payout and stake, positive or negative. |
| Probability | The estimated likelihood of a given outcome. |
| Risk | What you stand to lose. |
| Reward | What you stand to gain, relative to that risk. |
The percentage of trades that resolve profitably over a given sample.
The win rate required just to cover losses, given a specific payout ratio.
(Probability of win × payout) − (probability of loss × stake) — the long-run average outcome of a strategy.
How much is risked relative to how much can be gained on a single trade.
A high win rate with a poor payout ratio can still have a negative expected value. The maths matters more than the streak.
Visual price history used to identify patterns and trends.
The live and historical price feed a platform or API provides.
Calculations layered onto price data — moving averages, RSI, and similar tools.
Software that executes a defined strategy automatically. Covered in full on our Bots & Automation page.
Trading options, CFDs and synthetic indices carries a high level of risk and can result in the loss of your entire stake. Past results, including from bots or signals, do not guarantee future performance. Nothing on this page is financial advice, and trading should never be presented or treated as guaranteed income.