Binary Options No Touch
- Published: Friday, 16 January 2015 16:52
- Written by Stephan
This type of trading of binary options represents the opposite of the American principle of the functioning one touch version: A predefined target price should not be allowed to be reached during the duration of the option. The closer the predefined price of the broker is to the current, chosen base value, the bigger the risk becomes.
No contact – No touch trading
Even with this version of binary options, it is about the quantitative dimension of the price change, so the fundamental rise or drop isn’t enough, which is also the case with call and put options. Each of the binary options underlying a market trend of a base value, - these include several shares, indices, commodities or currency pairs, - may not reach the target price in this case. The less a price moves, the bigger the chance to win in no touch trading. For traders, this means that they must proceed oppositely to one touch options.
Analysing base values – calm waters needed
For no touch options, the suitable base values are thus those, whose price moves sideways in a narrow channel. There should be no important information or releases to be expected along the duration, since bigger deflections will otherwise be probable. If for example, the current gold price of 1,272 US Dollars per fine ounce is not allowed to move till the brand of 1,275 US Dollars, the publication dates for the unemployment and the inflation rate, press conferences of the EZB and times of political crises are less suitable because the market trend will then be unpredictable.
The demand for gold as a safe haven can increase erratically, as soon as insecurities for the capital develop in the economy or from crisis situations. Of course, the duration of a no touch option also plays an important part and the longer this takes, the bigger the risk will become.
A contact – and the no touch option ends
It does not matter, whether the base value is eliminated from the target mark when the option expires. Once the market price has reached the predefined value, the option has lost and ended. In a normal risk level, which is partly determined by the duration and partly by the separation of the aim from the initial quotation, profit margins between 65 and 90 percent are possible and increase significantly. This type of trading of binary options requires analytical technology, experiences and background knowledge, which beginners must first work hard for. Finally, besides the base values, external impulses also play an important part. Should “no touch” binary options not turn into mere gambling, preparation and a cool head belong to the indispensable conditions for the trader.