Your Money. Personal Finance. Your Practice. Popular Courses. Options and Derivatives Advanced Concepts. What Is a One-Touch Option? Key Takeaways A one-touch option pays a premium to the holder of the option if the spot rate reaches the strike price at any time prior to option expiration.

One-touch options are usually less expensive than other exotic or binary options like double one-touch or barrier options. Derivatives, like one-touch options, are not frequently traded by small investors. Compare Accounts. Advertiser Disclosure ×. The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear.

Investopedia does not include all offers available in the marketplace. Related Terms. What Are Stock Options? Parameters and Trading, With Examples A stock option gives an investor the right, but not the obligation, to buy or sell a stock at an agreed-upon price and date. Currency Option: Definition, Types, Features and When to Exercise A contract that grants the holder the right, but not the obligation, to buy or sell currency at a specified exchange rate during a particular period of time.

For this right, a premium is paid to the broker, which will vary depending on the number of contracts purchased. Option Strike Prices: How It Works, Definition, and Example Strike price is the price at which the underlying security in an options contract contract can be bought or sold exercised. Put to Seller Put to seller is when a put option is exercised, and the put writer becomes responsible for receiving the underlying shares at the strike price to the long.

LEAPS: How Long-Term Equity Anticipation Securities Options Work Long-term equity anticipation securities LEAPS are options contracts with expiration dates that are longer than one year.

Quadruple Quad Witching: Definition and How It Impacts Stocks Quadruple witching refers to a date on which stock index futures, stock index options, stock options, and single stock futures expire simultaneously. Partner Links. Related Articles. However, you will lose the invested amount if the price decreases. For touch options trading, remember that the predetermined value can be less than or greater than the spot price.

Once the price of an asset hits, i. But if your prediction is incorrect, you will end up losing the invested amount. The no-touch option is exactly the opposite of the touch option. In the no-touch option, a trader needs to analyze that the price of an asset will not reach its predetermined value. Before the expiry ends, if the stock touches the strike price even once, you will win. But if not, you will lose.

The first three one-touch binary options are well recognized in the retail market and have been joined by Timeline and Onion as potentially being other strategies of interest to the retail client.

One-touch binary options and no-touch binary options are path-dependent, i. where the underlying price is at the expiry of the strategy is not critical, but the path the price took in getting there is.

This is because with one touch binary options the underlying price has to trade only at or above if a call once, or at or below if a put once in order for the trade to have won or lost, and subsequently settle. The double no touch strategy has two strike prices pitched, one above and one below the current underlying price, and the strategy wins for the buyer if at expiry neither strike has been touched.

Finally, it should be noted that very often touch binary options and one-touch strategies will be constrained by the need of the underlying to touch or not within a particular time zone window. Find more articles in my Binary Options Glossary. Show all posts. What is a crypto wallet? Definition and example. What does Bearish mean? What is the value at risk? Definition and explanation. What is an underlying asset?

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With the double one-touch binary option trade, the binary options trader selects a set of upper and lower price barriers above and below the current market price in which he thinks the price of the underlying asset will hit before the option expiration time.

The broker will offer him a payout percentage corresponding to his selection. For the investment to payoff, the price of the underlying asset only needs to hit either one of the price barriers once before the option expires.

Payout will vary greatly depending how far away the barrier prices are and the time till expiration. The further away the barrier prices, the higher the payout. The longer the expiration time, the lower the payout as one has more time to hit the barriers. It is entirely up to the trader how much he wishes to invest with each purchase of the binary option but the minimum and maximum he can put in with each option varies across brokerages.

Conversely, there is the double no-touch variant as well. See Double No-Touch Binary Options. Many of the most popular financial instruments such as currency pairs, equities and commodities are available to trade using binary options. Is binary option a legitimate financial instrument or just another form of gambling Unlike humans, robots have no emotion and do not need to rest, so they can make a lot more trades than humanly possible, combined with perfect consistency Learn how you can get scammed when trading binary options if you are not careful With so many scam brokers out there, before you learn how to trade, one must know how to separate the wheat from the chaff and find a trustworthy binary options brokerage How often does my trades need to be successful in order to be consistently profitable in the long run when trading binary options?

Risk Warning: Stocks, futures and binary options trading discussed on this website can be considered High-Risk Trading Operations and their execution can be very risky and may result in significant losses or even in a total loss of all funds on your account. You should not risk more than you afford to lose. Before deciding to trade, you need to ensure that you understand the risks involved taking into account your investment objectives and level of experience.

Information on this website is provided strictly for informational and educational purposes only and is not intended as a trading recommendation service. com shall not be liable for any errors, omissions, or delays in the content, or for any actions taken in reliance thereon. Double One-Touch Binary Option Payoff Diagram. The Options Guide. What are Binary Options? What Can I Trade Using Binary Options? Main Types of Binary Options How to Trade Binary Call Option How to Trade Binary Put Option.

High-Low Binary Options One-Touch Binary Options No-Touch Binary Options Double One-Touch Binary Options Double No-Touch Binary Options. Is Binary Options Trading a Scam? How to Select a Binary Options Broker? Binary Options: Trading or Gambling?

Home About Us Terms of Use Disclaimer Privacy Policy Sitemap Copyright com - All Rights Reserved. General Risk Warning: The financial products offered by the company carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose.

Binary Options One-Touch: FAQs What is the Difference Between Binary Option and Digital Option? For the investment to payoff, the price of the underlying asset only needs to hit either one of the price barriers once before the option expires. Naturally, this is the type of stock binary traders should avoid. Percival Knight. Currency Option: Definition, Types, Features and When to Exercise A contract that grants the holder the right, but not the obligation, to buy or sell currency at a specified exchange rate during a particular period of time.

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