Binomial Model (probability up and down)

Could someone please explain this to me? When using the binomial model, when is it appropriate to calc the probability of an up or down move ( (1+r-d)/(u-d) ) and when do you just use 50/50?

In the examples I have been doing, it seems like you need to calc when using the binomial trees for options and you assume a 50/50 probability when using binomial trees for fixed income. Is this right? It seems counterintuitive to me as it should be consistent across the board.

You use 50/50 for fixed income (bonds) and the 1+r-d) stuffs for equity (option). INMO

The 1+r-d/(u-d) os called risk neutral probability. It is not an empirical probability. It is the probability that creates a risk neutral tree. But that seems a bit theoratical now. you would use it to value options as preppie pointed out above.

Got it. Thanks guys