What is a One Touch Option?

Binary options trading is evolving continuously and the binary options brokers are offering more features with each passing day to attract binary options traders to their website.

Many new styles of trading have also been introduced by the binary options brokers in an attempt to increase their customer base. One touch options is one of the new styles of trading with an unmatched potential payout.

Continue reading below the table…

What is one touch option trading?

One touch trading is a unique trading style. In one touch options you can find payouts as high as 700%. It is definitely the highest in binary options trading.

In one touch trading the binary options brokers define a price limit keeping the current price of an asset in mind. This limit can be both higher and lower than the current price level. As a trader you have to decide if the price limit will be touched.

One touch options is different in many ways. One of the key differences is that in one touch trading you have only one outcome to make an investment on. You can put money only on the prediction that the specified price limit will be touched by the price level chart. You can’t make an investment on the prediction that the specified limit will not be touched. For most of the binary options brokers the expiry period is one week and it can’t be changed. It means that if the price level is touched by the asset even once during the entire week you will win the trade.

Another important difference is that most of the binary options brokers allow the trading amount to be in terms of $25 only. You have to trade in terms of units where one unit is equal to $25 which means that your trading amount will be a multiple of $25.

When to trade one touch options?

The reason why the potential profit is so high is because the chances of you winning is low in this mode of trading. There is a significant difference between the current price level and the upper or lower limit of the asset. Due to this large difference most often the asset price level will not touch the limit even over a large expiry period of one whole week.

You should look for strong market sentiments to trade one touch options. If there is a strong momentum in a particular direction and the limit defined by your binary options broker is also in the same direction you can trade that asset under one touch options. If the market is responding in the usual manner and there is no significant news regarding the binary options market or a binary options asset, it is not recommended to trade one touch options.

You need to look out for the right opportunities to trade one touch options otherwise your investment amount will most probably be lost.

Conclusion

One touch options offer the highest payouts but at the same time the probability that you will win an investment under this section is low. Hence you have to be very selective and look for the right opportunities when trading one touch options.