Touch & No Touch Options
When you start trading binary options, you’ll note you have access to several types of instruments. The most common and simplest among them are call and put trades. These are predictions that the price of a trade’s underlying asset will move up or down (respectively). Beginning traders typically start with call/put trades because they’re easy to understand. After they gain some experience, many venture into one touch binary trading.
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The above example is from 24Option. The white jagged moving line is the current price point. The light gray section at the top of the chart is the ‘touch’ line. If you were to select ‘touch’ and enter a trade amount and click ‘buy’, all that you have to do is have the price move up and hit that point.
Sometimes called touch or no touch binary options, these trades are slightly more complicated than calls and puts. More than merely predicting the direction an asset’s price will move, you must also predict whether that price will reach a specified target (or strike) price. This will become clearer below as we explain, in detail, how one touch binary options work.
How Touch And No Touch Binary Options Work
As noted, with one touch trading, you are predicting whether an asset’s price will reach a certain level before the trade expires. This level can be above the starting price or below it. Your trade becomes immediately profitable if the target price is reached. The trade is closed and the payout – you’ll know the potential return and corresponding payout ahead of time – is deposited into your account.
We’ll use a simple example to illustrate how this works.
Suppose the underlying asset is gold. The spot price – the price of an ounce at the time you execute the trade – is $1,605 and the strike price is set at $1,620. (Some binary options brokers will let you set the strike price.) Further suppose the trade requires $100 in capital, and pays out $170 if the strike is reached.
Here, your trade is profitable if the price of an ounce of gold reaches $1,620 at any time before the trade expires. Once it hits that price, it no longer matters if the price plummets. It has “touched” the target level, and $170 is added to your account. If the price of gold doesn’t reach $1,620, you’ll lose your investment.
No touch binary trading works in the opposite fashion. You are predicting that the asset’s price will not reach a particular level. As with one touch binary options, the target level can be set above or below the asset’s spot price. (In most cases, you set the level.) Here, if the asset’s price reaches the target before expiry, the trade is immediately unprofitable. You will lose your investment.
To demonstrate, let’s continue with our gold example…
Suppose the spot price is $1,605 and you have set an upper limit of $1,620. With no touch binary trading, this means your trade will be profitable as long as the price of gold remains below $1,620 until expiry. If at any time while the option is active the price of gold hits the target, the trade is closed out of the money.
You can also set a lower limit. For example, you can predict that the price of gold will not fall below $1,590 before the trade expires. This works in the same way as the trade described above, but as a mirror image to it.
Returns And Profit Potential On Touch Binary Trading
When you start to trade one touch binary options, you’ll notice the potential returns grow larger the further away the strike price moves from the spot price. For example, a one touch binary for gold with the spot price at $1,605 and the target price at $1,620 may offer a 70% return. The same trade with the target price set at $1,630 might deliver an 85% return.
Conversely, with no touch binary trading, the further away the target level moves from the spot price, the smaller the return. A no touch trade with gold’s spot price at $1,605 and the target level at $1,620 may return 65% on your investment. If you move the target level out to $1,630, the potential return might fall to 60%.
Basically, the greater the risk of losing your capital, the larger the potential return and profit you stand to gain. Exceptions aside, this is the general rule with all investment vehicles. Thus, when you see a binary options broker offering a high-yield touch option, realize that the risk accompanying the trade is higher.
This page will also cover the potential returns you can expect to see when you trade touch and no touch binaries. And of course,
Getting Started With One Touch Binary Betting
We’ll start by pointing you to several trusted brokers that offer one touch trades. However, 24Option is traditionally the best broker offering these types of trades on a regular basis.
If you already have experience with trading binary options, you’ll likely be comfortable with touch and no touch binary trades. In some ways, these instruments are little more than an extension of simple call/put trades. You’re still predicting the direction in which an asset’s price will move, but are also forecasting the extent of that movement.
If, on the other hand, you are new to binary options, start with calls and puts. They’re simple and elegant from a pure trading perspective. They can be executed and closed quickly – some in 5 minutes – which smooths your learning curve. Along the way, you can take the time to focus on a few preferred assets. Learn about the factors that influence their prices.
Once you have a fair grasp of simple binary options, move into touch and no touch trading. By the time you do so, you’ll be able to make better predictions about the price movements of your chosen assets. That is how successful – i.e. profitable – binary options trades are executed.
4 Reputable Sites To Trade One Touch Binary Options
Although one touch trading is technically considered to be an exotic form of binary options trading, most brokers offer it. The key is to identify three or four brokers you can trust. We recommend registering accounts with a few brokers so you can compare them side by side and ensure you are receiving the best possible returns for each trade. Below, we’ll profile four binary options brokers we’ve found to have great reputations, competitive returns, and a good variety of assets and instrument types.
MarketsWorld – If 24Option is one of the best-regarded brokers in the industry, Markets World is one of the favorites among veteran binary options traders, especially those in the US who have very few brokers to choose from. They maintain an office in New York, are known for their responsive support, and host trades covering a huge list of assets in the four major categories (stocks, currency pairs, commodities, and indices). They also offer free access to a live demo account. Visit Markets World and create an account to start trading one touch options today.
24Option – Arguably one of the best-regarded brokers in the binary options business, 24Option is our top choice for one touch binary trading. They use a top-notch trading platform (OptionFair), offer competitive returns (65% to 350%, depending on the instrument), and maintain a relatively low minimum trade amount ($24). They also provide access to numerous binary option types, including high-low trades, range options, and 60 second binary options. Register an account at 24Option.com today to get started.
IQ Option – We like IQ Option for several reasons. They require a low minimum deposit ($10), which allows new traders to get started easily. They also maintain an impressive list of assets to trade, including 9 commodities, several stocks, and more than a dozen currency pairs. IQ Option uses their own proprietary trading platform, which comes with a feature called Option Builder. This feature allows you to customize your trades, giving you a lot of flexibility to match your trading activity. Visit IQ Option for more details.
Binary Mate – One of the first things you’ll notice at popular US facing broker BinaryMate.com is that the potential returns on their trades are slightly lower than those found elsewhere. The reason is worth considering. This broker provides a 15% rebate on trades that expire out of the money. If you incorporate this feature into your trading activity, it is possible to make more in overall profits than you might elsewhere. Another reason we recommend Binary Mate is because of their asset list. It is one of the largest we’ve found. Visit them today to register your account.
Those who seem to generate the best results with one touch binary trading are traders who have a strong understanding of their chosen assets. If you’re just getting started, here’s what we recommend:
Step 1: Visit the four brokers above.
Step 2: Register an account at each.
Step 3: Get some experience with call and put binary options.
Step 4: Move into touch and no touch trading to expand your profits.