One Touch Binary Options Trading With Example

The One Touch Option – Weekly Options Trading

one touch option risk vs. reward in weekly options trading image One-Touch binary options are a very different beast than your other common varieties of binary option contracts. For one thing they can only be traded during the weekends when global markets are closed. For another they can have returns that exceed 100%, in some case by quite a lot. Obviously the greater the risks you take, the greater your potential rewards will be. These one-touch option contracts have become fairly popular in the last couple years and are now offered by most of the top brokers in the industry. Return rates can vary quite widely among brokers though so be sure to look at that whenever considering opening an account with someone.

What Are One-Touch Binary Options?

A type of exotic option that gives an investor a payout once the price of the underlying asset reaches or surpasses a predetermined barrier (Source: investopedia.com).

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One-touch options are also frequently referred to as “Touch/No Touch” options as well. These options are generally available on weekends only and have an expiry window that runs through the following week, expiring Friday at market close. If your one-touch option gets to that point though, then you have lost. This is because if at any time during the week that option were to reach the target level, the contract would be immediately closed out, and your account credited with the profits due you. As far as what those target levels are, that is predetermined by the broker based on market conditions and historical data. Sometimes you are presented with more than one choice of level but usually your only determinations are the direction (call/put), and the amount to invest.

a traderush one touch binary options trade image

As you can see from the image above the payouts on these one touch options can be very high indeed. In the case of the Traderush platform shown here (where our personal trading account is) you can find returns as high as 600% in some cases. A maximum return of 500% is more common, but a few other top brokers offers returns up to 600% so just do your homework before jumping in to find the best returns. So now that we know what one-touch binary options are, how do people go about trading them?

How To Trade Weekly Options – One Touch Option Example

Most brokers offer weekly options trading contracts in “units,” of $50 each (though we have seen a couple with $25 units). So clearly the minimum trade amount in these contracts is the cost of one unit, $50 in our example from Traderush. The return rate offered by your broker will be based on market conditions (volatility) and the distance between current price and the target price.

example picture of how to trade weekly options on the traderush platform

Luckily, learning how to trade weekly options is a breeze. Lets say that we are decidedly bearish on Gold at the moment (true) and believe that there is at least a reasonable chance of the asset going down to test that $1200 level next week before bouncing back up a bit (not quite true which is why we are not really executing this trade). These beliefs therefore lead us to purchase a put touch option contract for two units = $100 invested. This option will have until next Friday now to reach that target level of just under $1200 USD. Because the gap at the time of purchase is relatively large — at around $50 — the return rate offered is also relatively large at 430%, or $530 on our $100 investment.

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If at any point during the following week the price of Gold so much as touches that $1190 price level then our trade will be automatically closed out by the broker and our account credited with the $530 return due us. What a deal eh? If, however, we turned out to be wrong in our analysis and the Gold price never reaches that magic $1190 mark then we would be flat out of luck, a bit fat zero return. There are no refund rates offered on one-touch binary options. They are truly binary in nature.

Stay tuned for our upcoming articles on various strategies for trading one-touch option contracts!

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BinaryBoss

Jason--AKA "BinaryBoss"--is a graduate of WSU with a degree in economics with a financial markets focus. In 2009 Jason left his job with Microsoft in his home state of Washington to pursue a life of self-employment.

One thought on “One Touch Binary Options Trading With Example”

  1. Broker’s shows you the good way to trade if you meet the right one not the scammers,they are lot–In the EU-Regulated crowd especially. Not so much with the remaining US-friendly brokers out there because it has become so competitive in that market. The remaining US-accepting brokers have to perform sat 500% or go the way of their peers and disappear from the US market… :-<. They are there to serve and please, for now anyway...but they seem to be of as dying breed unfortunately for us US-Based binary option enthusiasts, or indeed global enthusiasts...are down to 5 or so US brokers that have proven themselves trustworthy over time. No matter where n the world you live I recommend either 24Option or CTOption, maybe Finpari as a backup.There ARE MORE scammers out there now unfortunately because they know the situation has become much more confusing. A situation scammers and frauds always take advantage of, regardless of what you're talking about.But once I learned to "weed out" the fraud, scammers, month's late payment brokers on withdrawals, etc. We did our best to weed out All the bad seeds, tested the "finalists" with Min. deposits and a nice, thorough testing of their platforms and services. And then leave only good ones up, even if that leaves us short Brokers to offer our readers/visitors. Currently that is only 3 US accepting brokers ATM, with high hope of adding 1-2 more this week to fill out our "Top 5..." page/post for now anyway.You CAN make money in binary options, no doubt! Practice, reading material, more practice, and a solid strategy--not as hard as it sounds...find something solid, stick with it and give it a chance...you have to account for the random ups and downs of the market...which is also why you should keep your trades low if your balance is low. A run of bad luck/trades and BOOM! your account is all of a sudden empty. No good. So remember to only place trades that you can afford to lose! Best of luck back atcha JM! Lets make some Money together! Cheers! Ethan

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