What Is the Over/Under Contract?
The Over/Under contract is a digit-based binary option available on Deriv. Instead of predicting whether price will go up or down, you predict what the last digit of the price quote will be at the moment your trade settles.
Specifically:
- Over X: You win if the last digit of the price at expiry is strictly greater than X (where X is 0-8)
- Under X: You win if the last digit of the price at expiry is strictly less than X (where X is 1-9)
Example: If you place an “Over 4” trade, you win if the last digit is 5, 6, 7, 8, or 9. You lose if it is 0, 1, 2, 3, or 4.
The Probability Mathematics
This is the foundation of any digit strategy. Each digit (0-9) appears with equal probability on a truly random price feed — 10% chance for each digit. This means:
| Contract | Winning Digits | Theoretical Win Rate |
|---|---|---|
| Over 0 | 1,2,3,4,5,6,7,8,9 (9 digits) | 90% |
| Over 1 | 2,3,4,5,6,7,8,9 (8 digits) | 80% |
| Over 2 | 3,4,5,6,7,8,9 (7 digits) | 70% |
| Over 3 | 4,5,6,7,8,9 (6 digits) | 60% |
| Over 4 | 5,6,7,8,9 (5 digits) | 50% |
| Over 5 | 6,7,8,9 (4 digits) | 40% |
| Under 5 | 0,1,2,3,4 (5 digits) | 50% |
| Under 6 | 0,1,2,3,4,5 (6 digits) | 60% |
| Under 7 | 0,1,2,3,4,5,6 (7 digits) | 70% |
| Under 8 | 0,1,2,3,4,5,6,7 (8 digits) | 80% |
| Under 9 | 0,1,2,3,4,5,6,7,8 (9 digits) | 90% |
The trade-off is that higher win-rate contracts offer lower payouts, and lower win-rate contracts offer higher payouts. This is how Deriv maintains its edge across all contract types.
Calculating Breakeven at Each Level
The payout varies by contract level. As a general principle:
- High win-rate contracts (Over 1, Under 8) → very low payouts (often 5-15%)
- Medium win-rate contracts (Over 3, Under 6) → moderate payouts (often 30-50%)
- Lower win-rate contracts (Over 5, Under 4) → higher payouts (often 80-100%+)
Always check the actual payout displayed by Deriv before confirming a trade. The platform shows you the exact payout in real time. Then calculate your breakeven win rate: 100 ÷ (100 + Payout %) and compare it to the theoretical win rate of your chosen contract.
If your theoretical win rate significantly exceeds your breakeven rate, the contract has a positive expected value in the long run — assuming the digit distribution is truly random.
Which Over/Under Level to Use?
The most commonly traded levels among digit traders are Over 2, Over 3, Under 6, Under 7 — the sweet spot where win rates are reasonable (60-70%) without the payouts being so low that they barely cover transaction costs.
Avoid extremes like Over 0 or Under 9 (extremely high win rate but tiny payouts that rarely produce meaningful profit) and Over 5 or Under 4 (near 50/50 with unpredictable outcomes).
Common Over/Under Strategies
The Consistent Level Strategy
Choose one contract level (e.g., Under 7) and trade it exclusively. This gives you the most data to evaluate your results and keeps your strategy simple and consistent. Over a sample of 100+ trades, your results will tell you whether the payout at that level is sufficient to generate profit at the real-world win rate you are achieving.
The Digit Frequency Observation
Some traders track the last digit distribution across recent ticks on the digit history panel available on Deriv. If a specific digit has appeared unusually frequently, some traders shift to contracts that exclude it (e.g., if digit 9 has appeared many times recently, shift to Under 9 or Under 8). This is statistical observation, not prediction — the underlying randomness means past frequencies do not guarantee future outcomes. Use with caution.
Risk Management for Over/Under Trading
- Use 1-2% of account balance per trade, as with all binary option contracts
- Set a daily loss limit of 5-6% and stop when you hit it
- Do not use Martingale — the natural variance in digit outcomes can produce long losing streaks even on high win-rate contracts
- Journal every trade: the level chosen, result, and payout received
- Review your actual win rate after 50+ trades and compare to theoretical probability
Honest Assessment: Does the Over/Under Strategy Work?
On a genuinely random digit feed, Over/Under contracts are mathematically fair — the theoretical win rates and payouts are designed so neither party has a persistent edge. In practice, consistent profitability depends on achieving real-world win rates that exceed your breakeven threshold after accounting for the payout structure.
Many traders find digit strategies compelling because of their simplicity and speed. The risk is that simplicity makes it easy to overtrade, and the fast settlement creates conditions for emotional, undisciplined trading. Strict session limits and a trading journal are essential.
As with all trading: test thoroughly on demo, track your results honestly, and only risk money you can afford to lose entirely.
About the Author
Bretton Gitonga — trading educator and founder of Money8gg. Years of hands-on experience with binary options and forex on Deriv. Contact Bretton.
