One touch/ no touch options
“One touch” and “no touch” are two types of binary options. They are available at a number of different brokers but the selection of this type of options are a lot smaller than the selection of regular binary options. “One touch” and “no touch” are considered exotic binary options and give you a lot higher return then regular binary options. Most “One touch” and “no touch” options will not mature in the money. You will need to be selective when you choose to invest in theses options to be able to make money.
“One touch” and “no touch” options can be based on any asset. The main difference between the two types of binary options is when they mature in the money.
Mature in the money
“One touch” and “no touch” work in opposite ways from each-other. The condition that will make one end in the money will make the other end outside the money. Lets look a little closer at what is required for each type of option to end in the money.
- A one touch option options in option that matures in the money if the underlying asset touch a certain level at least once during the maturity of the option. It does not need to be at that level when the option matures. One touch it all that it takes. These options usually require rather large movements in the underlying asset to mature in the money.
- A no touch option is the opposite of a one touch option. A no touch option will mature in the money if the underlying asset never touches a certain value during its maturity. The value that the underlying asset isn’t allowed to touch is usually rather close to the current market value and it only takes a small change in the wrong direction to make these options mature outside the money.
Do we recommend “One touch” and “no touch” options?
No we do not recommend that you trade with these options. These options give the broker an unduly large advantage towards the trader and they make it almost impossible to earn money over time. It is almost impossible to consistently pick the right options to be able to earn money. Regular options will give you a lower return but they make it a lot easier to earn money. We recommend that you stick to trading regular and short binary options and leave the exotic options to less savvy investors.
With this said. There might be instances when a single one touch option might be a good purchase. An example of this might be right before a quarterly report for a company that you think are going to report surprising information. This is however the exception from the rule.