As the name suggests, one touch trading with binary options has to do with a contact – namely with a predefined price of the base value. This type of trading corresponds with the American options, in which not the rate in the end is crucial, but only the fact that a certain value is reached along the duration.
Binary options – one touch is questioned
In comparison with the classical call and put options, one touch trading is designed for the achievement of the broker’s predefined price of the base value. The trader obtains the offer with the trading platform, so that he can estimate the possible profit and risk. For instance, should a current gold price be 1,275 US Dollars per fine ounce, a price of 1,275 US Dollars is reached within the next hours. If the trader accepts this option and invests his input, the development of the gold price decides in a predefined period of time. If the brand of 1,275 US Dollars is at one point reached, the option which is then ended immediately, wins. If the gold price misses this aim, the option expires in the end and the input is lost.
The profit margins of one touch options are dependent on the risk
In the normal risk category, the profit margins for one touch binary options range between 65 and 90 percent. However, this can clearly escalate depending on the durations and the range of the predefined target price from the current value – as well as the risk. For this type of trading, you should already have some background knowledge in the matter and concern yourself with the stock exchanges, the economy and upcoming political decisions. Quite often, base values of intense price actions are namely suspended if important appointments, such as the news conference of EZB, are due. Besides the fundamental analysis of the base values which is concerned with the share, the index, the currency pair or the commodity and its potential, the technical analysis of the chart also forms the foundation for the prognoses.
One touch as a challenge
This type of trading does not only restrict itself to the future price direction, but also to the strength of the particular movement. They are particularly suitable for when a stimulus implies the price movement. If, for instance, a rising inflation rate is disclosed, an increase in the price of gold is anticipated. If the EZB proclaims the rate cut, the US Dollar will become stronger in proportion to Euro. If the publication of more positive company figures befits, the appropriate share experiences a boost. On the other hand, important indicators from the chart technology also give signals which should be permanently examined by traders. The one touch trading thus represents a particular challenge in the trading.