Before starting, let’s just point out that the term “Touch” stands for “touch” in the sense of “touching”, “reaching” and therefore the Touch options have the particularity of being linked to a dynamic of touches. Let’s see in what sense, but first we define two types of binary options Touch:
- One Touch Options
- Touch / No Touch Options
As you can see in the first type we talk about a single touch, while in the second we talk about a “touch / no touch”. Let’s see together what these types of options consist of in more detail.
One Touch Binary Options
With the One Touch options the trader has to predict if the price of a given asset will touch once (and only once) a certain level, a given price. For example, if the quotation of an asset we have chosen is 45.6 and the one touch level is at 46, the trader will have to predict if the prices of the asset will touch only once that certain level (46). An example could be a rise, which continues to take place even after the option expires. Imagine a climb from 45 to 47 without a downside, you simply have a pass to 46 that continues towards 47 without retracing his steps.
Binary Options Touch / No Touch
With the Touch / No Touch binary options , the trader simply has to predict if the price of the selected underlying touches or does not touch a certain price, a certain level. For example, if the quote is at 45.6 and the touch level is at 46 the trader will have to predict if the price of the asset will break the level at least once , or not. The difference with the “One Touch” options lies in the fact that this level can also be touched several times. With the Touch / No Touch options you have two advantages:
- If you touch the Touch and the touch arrives “soon”, you can proceed immediately with another operation, perhaps taking advantage of the same trend
- If you touch the Touch and occur at a change of direction opposite to that with which you arrived at the touch, the operation is not affected as in the case of “One touch”. For example, if 45.6 comes to 47 and then returns down. the fact that retouching 46 does not change anything at all.
Option brokers always offer demo platforms to practice, so if you do not have a few clear passages, try them out practicing with virtual money. Binary options brokers allow you to use a demo platform only after opening an account and making a deposit, which you can still use to trade in real mode.
Go to lesson 10 – Binary Options Range