One-touch Binary Options are ideally suited to those traders possessing more aggressive temperaments because they provide very high rewards, i.e. up to 500%, albeit at high levels of risk. These are best used when assets are trading distinctive trends or when levels of volatility are high. Consequently, you should steer well clear of one-touch binary options until you have acquired sufficient skill and knowledge to competently handle their increased risk exposure.
Þ Trader Level: Advanced
Þ Risk Level: High
How to Use One-Touch Binary Options
Essentially, you will finish in-the-money if the price of the underlying asset of your one-touch binary option strikes a pre-selected value at least once before expiration. If price fails to achieve this goal, then you will close out-of-the-money and will lose your deposit. If the target price is higher than the opening value, then you need to initiate a CALL one-touch option. In contrast, if the target price is beneath the opening value, then you should open a PUT one-touch option.
For example, consider that the Bank of England has just announced that it has lowered its interest rates in order to bolster the faltering UK economy. After investigating the reasons for this decision, you conclude that the GBP/USD will drop amid increasing levels of volatility. You select a PUT one-touch binary option based on the GBP/USD as shown in the next diagram.
How to Use Aggressive Trading with High Yield Touch Options
- Identifying Volatility: Detect an asset that is displaying high levels of volatility on its charting charts.
- Record Key Parameters: Note the target price, the payout ratio; the rebate ratio and the listed expiry time of the applicable asset.
- Initiate Trade: Execute a CALL one-touch option if you have concluded that your chosen asset will rise in value. Alternatively, activate a PUT one-touch binary option if you have deduced that the price of your price will plunge in value.
- Monitor the Trade: You can track your binary option by using a graph, such as the one shown on the right of the below diagram. Usually, if the color of the graph is green then this indicates that the trade is currently in-the-money. If red, then your option is presently out-of-the-money. The red vertical line represents the time your option will expire.
When to Buy
You can buy one-touch binary options throughout every trading day and they will expire at various times chosen by your broker. You can even initiate them during the weekend. The following Friday will then be used as the expiry time.
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