Welcome back to our video series about binary options. In past videos we’ve discussed traditional binary options. Today we are going to talk about a special type of binary option called touch or no-touch.
A one-touch or no-touch binary option is a specific type of binary option. With traditional binary option, the idea is that the asset will be above or below the strike price at the time of expiration. The only time that is important for the trader is that expiration time. With One-Touch and No-Touch, the asset can hit the strike price at any time between when you enter the trade and expiration.
One-Touch and No-Touch Binary Options have a strike price which is away from the current market level. The trader needs to decide whether he thinks the market will touch or not touch the strike price. If the strike price is above the current market level, the decision is whether (or not) the asset will increase to the strike price prior to expiration. If the strike price is below current market, the trader must decide whether he thinks the market will trade down to the strike price before the option expires.
So when and why would you use a One Touch or No-Touch option as opposed to a traditional binary option? Well, I like them because they have strike prices away from the current market. They have payouts which are comparable to traditional binary options in terms of percentage. These types of options can be a great trading tool for your binary options trading strategy.