Binary Options Review

What is a One Touch Option, and How Can You Make Money from Them?

In the world of binary option trading, there are many different ways to get involved to try to make money, whether you are a serious investor or someone dealing in small figures looking to make a small incremental income on the side. One-touch options are one such way of binary trading, and are popular as they give the trader or investor a new level of control that is different from their usual method of dealing with binary options.

What is a One Touch Option?

One touch options can be exercised before the end of a specific trading period if they reach their target. One touch binary option trading works in a similar way to sports betting websites that allow you to ‘cash out’ if an income looks favourable, although the trader still has to wait for the binary option to expire as they normally would.These are often referred to as an exotic type of trade. The added level of flexibility and allure with this type of binary options trading comes because the trader or investor can set their own limits and timescales. They are available to buy at weekends when the markets are closed, offering an excellent opportunity to enjoy high returns outside of traditional business and trading hours.For example, if you were using Bank of Trade for one touch binary option trading, you could choose a particular stock or commodity, perform a call or put trade, and set your own target price. This type of trading differs from other types of binary option trading in terms of the payouts. A one-touch trade pays out as soon as a particular barrier has been exceeded. If you place a call trade on a commodity moving from 20000 points to 20010 points, the one touch option pays out as soon as it hits 20010.01. This is where this type of trading gets its name. After ‘one touch’ on the target price, your trade pays out.Much like regular binary option trading, there are only two outcomes available once you place your call or put trade. The barrier or benchmark you have set is exceeded, and you get paid, or it is not, and you do not get a return from your initial outlay. This type of trading is attractive because it allows traders and investors to make money on markets that are unsteady or volatile. A particular market might be trending upwards, for example, but the trader or investor might know that a higher price is unlikely to be sustained based on his or her own knowledge and previous history. Smart individuals can therefore make a lot of money by repeatedly dealing in this type of trade, and it is an area increasingly exploited by those with knowledge and expertise of binary options trading.

One Touch Binary Options: The Big Opportunity

There are several reasons why one touch binary options are seen as a huge opportunity, and why experienced traders love them and why beginner binary option traders are increasingly using them as their introduction point to these markets. Above all else, one touch trades can significantly enrich your binary option trading experience. Here are the main reasons why.

One Touch Returns

The potential for large returns is incredible; one-touch trades will commonly have a return between 150% – 500%. Contrast this to other binary trades, such as 60-second options, which typically return 70% – 85%, and it is easy to see why they are favoured so much. The level of risk a trader or investor takes on to see these returns, in terms of the capital they stake on a call or put, is within their control, too. Aiming for the bigger returns does not mean loading yourself with a higher risk. Clearly, there is a greater risk the more you expect the price to move, but in terms of financial outlay what you stake is the same. Contrast this with traditional trading and investing where the correlation between increased risk and reward is generally consistent, and you can see why people love one touch option trading. The higher returns are available because you are trading on the price increasing or falling to the level you predict. It is like choosing a sports team to win by a particular score rather than merely saying they will win.

One Expiry Point

One touch binary options with Bank of Trade expire once a week. For example, if a commodity closes at 20000 points at 1730 on Friday, you can place your put or call based on performance over the next seven days. Therefore, if you place a call and predict this particular commodity will exceed 200010, you only need it to reach that price once in the next week for you to see a return.

Fixed Price

At Bank of Trade, our one touch binary options are sold at a fixed price, which is not the current market price. This allows binary options traders using our platform to take advantage of favourable prices and the best market conditions in order to increase the likelihood of them seeing great returns.Like normal binary option trades, one touch trades are an “all or nothing” investment; you either get your full return, or you get nothing at all.These three points all demonstrate why one touch trading is becoming increasingly popular, and how they offer an alternative opportunity to alternative types of binary options trading, including standard trades and 60 second trades.

Buying Your One Touch Options

Buying your one touch options from Bank of Trade is easy. All you need to do is log into your trading account and select the relevant menu instead of binary options, option building, or 60 second binary options. Our options are available at a cost of $XXX per unit, and traders can buy up to X units, although there is no limit to how many one touch trades you can have going at a particular time.Whenever you buy one touch binary options, you will be presented with both the rate at which point your call or put will achieve its one touch, as well as the potential percentage return on your initial investment.

A Summary of How One Touch Trades Work

You know what a one touch trade is, you know why they are a huge investment opportunity whatever your objectives may be, and you know how to buy them; how do they work in terms of monitoring your trade?Options can be purchased from midnight on Saturday morning to 1900 on Sunday evening. They are then traded from midnight on Monday morning to 1710 on Friday of that week. The options you have bought and are trading then have their prices taken at 1700 each day. The prices, for avoidance of confusion and doubt, are taken from the Reuters sample rate, ensuring fairness and consistency for all traders and investors. If an option has moved above or below the call or put rate during the five weekdays, the return stated when the options were bought is paid out. Regardless of when the call or put target price is hit, monies are transferred to trader accounts during the Friday evening following the ceasing of trading for the week.All one touch platforms should offer a similar setup, so you know what you should be looking for and to expect in terms of timescales and deadlines.

Example

To give you an idea of how one touch binary option trading could bring you returns, we have prepared the following example.Say the commodity is gold, which has a starting price, known as a spot rate, of 1000. When you look at this one touch option, you will see the rate it needs to grow or fall in order to see a return, which is called the “in the money” price.In our example, gold would need to move from 1000 to 1010, which in this case would give you a 500% return. If you took out this one touch option on Saturday, you would then need gold to reach a price in excess of 1010 at 1700 hours on any day, Monday – Friday, for your option to expire in the money. Failure to do so will see the option expire out of the money, and there is no return.

Conclusions

For traders and investors who already enjoy binary trading, one touch options give them the opportunity to try something different. Due to the more specific nature of one touch trades, they are often best suited to experienced traders, although they can be an exciting introduction to binary option trading for anyone who finds the simple call or put mechanism too basic for their own tastes.You can open your one touch binary option account with Bank of Trade and get started trading right away, as well as benefit from our range of advice and resources that aims to point you in the right direction and make your one touch trading as productive as possible.

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