One Touch Binary Options

When trading options, there are a number of routes to take. One choice you’ll have to make is the type of option you want to trade. For the beginner the different options can sometimes be confusing, and it’s always a good idea to arm yourself with as much information as possible. For this reason we’ve dedicated a few pages on our site to the various types of options generally available. Here we’ll be looking at one-touch options, how they work, and whether they are a type you should be considering. The most popular and simplest options are call and put trades, which are predictions as to whether the price of an underlying asset will go up or down. This is a great type of option for beginners, as the concept is simple to understand. Once you’ve got a little practice in the basics, you might be tempted to move on to one-touch binary trading. So let’s see what it’s all about…

What is a one-touch option?

A one-touch option is the sort of option that promises a payout once the price of an underlying asset reaches or passes a predetermined level. An investor is able to set the position of the barrier when it expires, and how much the payout will be should the barrier be broken. There are only two possible outcomes, as you’ve come to expect with a binary options trade. If the barrier is broken a trader will receive the agreed full payout. If the barrier isn’t broken, the trader will lose the premium paid to the broker. This type of option is popular with traders who believe the price of an underlying asset will pass a certain level in the future, and for those who aren’t sure whether the higher price level is a sustainable one.

One-touch options are usually less expensive than double one-touch options, and are becoming very popular with commodity and Forex traders. We should mention that one-touch options can only be traded at the weekends when global markets are closed. One major reason for the popularity of one-touch options is that they can offer return rates of 200-600%.

We briefly touched on double one-touch options, and you might be wondering what these are. So let’s first explain before going any further.

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What is a double one-touch option?

one touch binary optionsA double one-touch option is a type that gives a trader an agreed-upon payout price if the underlying asset reaches or breaks one of two predetermined levels. The trader is able to determine the level of both barriers, the expiry date of the contract, and the payout should the price rise above one of the predetermined levels. Either of the price barriers must be broken before the option expires, or there will be no payout for the investor. If neither of the price levels is broken the option is considered worthless, and the trader loses their premium.

A double one-touch option is great when you believe the price of an asset will change dramatically in the future, but aren’t sure the direction it will take. A trader stands to benefit whether the price goes up or down, so it is a kind of straddle position.

Five steps to start your one-touch options trading

Tips on finding the best binary options broker

Let’s finish up by recapping some of the points we’ve touched on in one of our other pages, by looking at finding the best binary options broker, and what you should look out for.

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