One touch binary option trading is where a trader defines the touch point i.e. if the market value of underlying asset reaches the set target price before expiration. If predictions turns out to be correct trader gets a predetermined profit.
One touch trades are very similar as Above / Below option trades but here you need to predict i.e. will the market price Touch or Not Touch the target price anytime before a predetermined time?
For example, trader invests in EUR/USD, which is currently trading at spot price of $1.1114, and set touch price of $1.1186 by 19:15. This will give certain percentage of profit (In this case 75%). However, this payout ratio would be less than maximum pay-off percentage of 80-82%. This is because the closer a touch price is to a spot price, the lower will be a pay-off percentage for that trade. However, if for similar spot price with expiration date 7 days from today, trader sets touch target of $1.1410 it will give pay-off greater than our previous example. It’s important to remember that greater deviation from spot price arise greater possibility of risk.
Thus this type of binary option trading strategy suggests to carry out proper fundamental and technical analysis in order to correctly predict what price touch should be set, how far it should be set from the spot price and what expiration time is to be used in order to maximize profits. In most cases target price is already offered by a platform and trader just needs to choose from a list of possible options.
Double One Touch Binary Options
Double one touch as the name suggests is a binary option trading type in which trader sets two touch points. If the value of underlying asset hits either of the determined points investor will receive predetermined pay-off.
This type of strategy is similar to the one touch binary options, except two trigger points are established. This binary option trading type is traded if investors are unsure of the market movement (high volatility).
This type of trading is more complex than standard binary option trading or 60 second trading, however, if traded right, can be very profitable.
One Touch trades have another option where it’s possible to get up to 350% return on every trade. These type of trades are called ‘High Yield Touch’. These trades are riskier as price ranges are set with a greater reserve and in most cases it’s less likely that prices are going to reach those levels.