The one difference from Sharpe
Sharpe divides by all volatility. Sortino divides by downside volatility only. Everything else is the same calculation, so the two numbers move together until a trader has a lopsided return profile, and then they separate.
When Sortino sits far above Sharpe, the trader's swings are mostly upward. That is the signature of someone taking positions that lose a little often and win a lot occasionally.
Why Sortino fits binary contracts
Binary contracts produce exactly the lopsided profile Sortino was built for. A resolved market returns either the full payout or nothing, so a trader with a real edge on underpriced outcomes shows large positive deviations. Sharpe treats those as risk; Sortino does not.
The trap runs the other way too. A trader who sells expensive favorites collects small consistent premiums and shows a high Sortino right up until one favorite loses. Downside deviation is only informative once the sample contains real losses, so check the resolved-market count before trusting it.
Where 0xinsider uses the Sortino ratio
Trader profiles show Sortino as a downside-risk percentile against other graded wallets when the metric is available. The raw ratio is in the Pro data export. Read it alongside drawdown and profit to understand downside variability.
