With the growth in binary options trading, brokers are adding more types of trading to attract investors. One touch binary options are one of these newer features.
They offer high payouts and greater simplicity than stock trading. But are they really that straightforward – and are they suitable for beginners?
If you need a refresher on the basics of binary options, check out our 101 guide.
Otherwise, read on to learn more about one touch binary options.
So what are they?
They’re a way of investing that gives a set payout when the price of your asset hits a specific point.
The benefit of that means that you get to decide what that specific point is, how long you have until it expires, and how much of a payout you’ll receive.
Don’t get too excited though – your broker will probably have limits as to what that specific point can be.
The nature of one touch binary options means you only have to worry about two outcomes. Either your investment hits the trigger point and you collect your payout.
Or you don’t hit that specific point and you lose your premium. That’s the downside to a form of investing that might otherwise sound like magic.
Why might you use one touch binary options?
You might know that the price of your asset will surpass a particular point. But you don’t know that the price will stay at that level.
So you turn to one touch binary options because you’ll be able to capitalize on the price going past that point once.
The price only needs to exceed your set barrier by the expiration date for you to cash in.
These options are also less expensive than double one touch options, which allow investors to set two separate threshold levels.
You do need to be aware that the chances of winning are lower with these options. There can be a huge difference between price levels, making it more difficult for your asset to surpass your set limit.
But if you get it right, you can definitely take advantage of those higher payouts.
How do they work?
You can buy options whenever you want, but you can only trade during the working week. So that’s Monday to Friday.
Start off by choosing the best broker. You can compare brokers here, but look for one with experience in one touch binary options.
Make a deposit when you’re ready to make your first trade.
Choose an asset that you think will achieve its goal rate. Do your homework and really analyze the assets you can choose from.
Assets can be stocks, indices, commodities, and forex pairs. The last option is volatile in the market so often yield higher payouts.
Invest in your chosen asset – but use small amounts when you’re starting out. Choose the price direction.
Try different strategies until you find a formula that works for you. Once you’ve got the hang of it, you can start investing higher amounts.
Also, check out our guide to the best time to trade binary options.