Deriv trade typesUpdated 2 min readBy the FXNOD team
Higher/Lower on Deriv: barriers, payouts and risk
In Higher/Lower you choose a target price, called the barrier, and predict whether the market will finish above it or below it when the contract ends. Moving the barrier changes the odds: an easy target pays little and a hard one pays a lot. Deriv says that if the exit spot equals the barrier, the contract does not win.
How it settles
- Higher wins if the exit spot is strictly above the barrier.
- Lower wins if the exit spot is strictly below the barrier.
- Only the price at the end counts. Touching the barrier during the contract decides nothing.
The barrier is the trade
| Barrier for a Higher contract | Chance of winning | Payout |
|---|---|---|
| Well below the current price | High | Small |
| At the current price | About even | Close to double the stake |
| Well above the current price | Low | Large |
The payout and the probability move in opposite directions by design. A far barrier that pays five times the stake is priced as an event that happens less than one time in five. There is no barrier that is both likely and well paid.
Break-even on any barrier
Divide the stake by the total return. A contract that returns 12 on a stake of 10 needs to win more than 83.3% of the time. One that returns 50 on a stake of 10 needs to win more than 20%. Compare that figure with how often you honestly expect the price to finish beyond the barrier.
Common mistakes
- Choosing an easy barrier because it wins often, and ignoring that one loss cancels many wins.
- Choosing a far barrier for the large payout without counting how rarely it arrives.
- Confusing it with Touch: the price can pass the barrier and come back, and a Higher/Lower contract is judged only at the end.
In FXNOD
Higher/Lower is in Trade Pilot, where you set the target and read the quote before buying, and it is one of the trade types a Bot Forge bot can buy.
Questions people ask
- What is a barrier in Higher/Lower?
- The target price you choose. The contract is judged on whether the exit spot is above or below it.
- What happens if the price ends exactly on the barrier?
- Deriv says that if the exit spot is equal to the barrier, you do not win the payout.
- Which barrier is best?
- None is better on average. The payout is set to match the chance of winning, less the contract's cost.
Try this contract on demo
Every trade type in these guides is in Trade Pilot, and a bot in Bot Forge can buy it. Read the quoted payout and try it with Deriv's virtual funds.
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