Touch binary options and no-touch binary options, also known as one touch binary options, are a great way for you to further customize your trading experience. There are in fact only 2 possible outcomes as you already know of binary options. You can be right or wrong – there is no middle ground.
As a beginner it is important you start with Put/Call trades as they are simple and easy to understand and they will also give you the right foundation that you will require when investing in one touch binary options.
Touch and No-Touch Binary Options, What Are They?
Touch and no touch binary options are really easy to understand. Basically, your options broker will set a price goal and if you chose ‘touch’ then the price of your chosen asset must meet/surpass the broker’s set price during the active minutes/seconds of the trade. If you choose the touch option and the price is reached or surpassed then your trade is said to have ‘touched’ and you will make profit. However, if the brokers set price is not reached then you will not have ‘touched’ and you will not ‘end in money.’ However, you will be profitable if you had chosen ‘no touch’ option. It is really that simple.
How Touch and No Touch Binary Options Work
Touch and No Touch binary options are quite common in times of market volatility when prices are uncertain. For instance, if the price of an asset is wildly going up and down, then you might not have a clue as to where the price will be 30 minutes from now, but on the other hand you can with a certain amount of certainty tell that the set price will be touched, even if it is only for a very brief moment. It is in such moments when touch and no touch trades become really powerful.
As noted above touch/no touch trading is all about predicting that an asset price will touch a certain price level before it expires. This level can be below or above the starting point. Below is a simple example to show you exactly how this works.
Suppose the underlying asset is silver. The spot price (the price of an ounce at the time you execute the trade) is $1,800 and the strike price is $1,820. (Some brokers will allow you to set your own strike price). Let’s further suppose that the trade requires $100 investment and pays out $170 if the strike is touched.
Here your trade will be profitable if the price of an ounce of silver reaches $1,820 at any time before the trade expires. Once it touches that price, it no longer matters if the price goes further up or plummets. It is thus said to have ‘touched’ the strike price and you will have the $170 added to your account. However, if the price of silver doesn’t reach the strike price, you lose your investment.
No touch binary options trading on the other hand works in the opposite fashion. Here you are predicting that the asset price will not reach a certain level. You will end in the money if the price does not get to the spot price. However, you will lose if the asset’s price reaches the spot price.
Returns and Profit Potential of Touch and No Touch Trades
When you invest in one touch binary options you will notice that potential returns increase with the increase in spot price. For example, using the illustration above, a one touch binary trade for silver with the spot price $1,800 and the strike price at $1,820 may offer you 70% return. The same trade with the strike price increased to $1,840 might deliver an 85% return.
Conversely, with no touch binary trading, the further away the price moves from the spot price, the smaller the return. Using the same illustration as above, a no touch trade with the silver’s spot price at $1,800 and the strike price at $1,820 may return 65% on your investment. However, if you move the strike price to $1,840 then the potential return might fall to 55%.
Basically, the greater the risk of losing your investment, the higher the potential return. Therefore, whenever you come across a broker that’s offering high-yield touch returns then you should realize the risk accompanying the trade is higher.
Who Offers Touch and No-Touch Binary Options Trading?
Pretty much all brokers now offer touch and no-touch binary options, but as it is the norm, some brokers are better than others. The secret here is to identify at least 3 brokers that you can trust and trade often with. Below are the best binary options brokers with competitive returns, good variety of assets, and great reputations.
24Option – Possibly one of the best-regarded binary options brokers and our top choice for touch and no touch binary options trading. They use a world-class trading platform (OptionFair), maintain a relatively low minimum trading amount ($24), and offer competitive returns (between 65% and 350% depending on the instrument). They also provide access to numerous binary options types such as 60 seconds binary options and high-low trades. Register an account at 24Option today to start enjoying all these perks.
Banc de Binary – In a long list of best binary options brokers, Banc de Binary is on top there with the likes of 24Option. This platform is mainly a favorite among veteran binary options traders. Their main office is in New York and they are well known for their huge list of assets in the 4 major categories (currency pairs, indices, commodities, and stocks). They also offer responsive support and free access to live demo accounts. Visit them today to start trading touch and no touch binary options.
AnyOption – If you have ever traded with another broker then one thing you will immediately notice at AnyOption is the slightly lower potential returns. The reason for this is simple and actually worth considering. They provide a 15% refund on all trades that end out of money. If you critically consider this then you will realize that it is possible to make more in overall profits trading on their platform than you would anywhere else. They also have a huge asset list. Register for an AnyOption account today.
TradeRush – There are a couple of reasons why we love TradeRush and here are a few. They have an impressive list of assets to trade (several stocks and commodities together with a dozen currency pairs). They also ask for a relatively low deposit ($200) and use the Spot Options platform that comes with the Option Builder feature. This feature gives you a chance to customize your trades, giving you a lot of flexibility to match your trading activity. Open your TradeRush account today.