One touch options are one of the most revolutionary features of binary options. With these, it doesn’t matter what the final price of your asset is at the end of the expiration period. In this sense, one touch trading mimics the control that you would assert with traditional methods of trading--such as within the stock market or the Forex market. Rather than be at just the mercy of time, you can look for a price that appeals to you and execute that trade. You still will have the expiry to go up against, but now if the movement is in your favor early on, but fizzles before the trade expires, you will still reap the full profits that you had coming. This would be the same thing you could do if you wanted to sell off a currency lot if the price target landed earlier than expected, for example.
One touch options also have another benefit, one that is often under utilized. The high yield one touch is one of the most lucrative types of trades out there within the binary market. It is not uncommon to find rates of return at 350 percent or more. And while these trades are obviously more difficult to hit, they are certainly not impossible. The trick is to time them perfectly so that you can get the maximum correct trade rate out of them. Let’s say you are looking at a one touch trade for the NASDAQ, and you think that in the next four hours, it’s price will go up significantly. This is good knowledge, but now you need to quantify it. What does “significantly” mean to you? Is it $25? Is it $250? For regular binary options, both would be valid choices. An estimated $25 change in a smaller index like this is usually enough to base a trading opinion on.
But not with high yield one touch trades. You need a lot of movement, and you always need to take into account that the movement might not be as much as you would like. With the NASDAQ example, your trade would return 430 percent with a specific broker, but it would need to move about $90 in price. A guess of exactly $90 probably would not give you enough of a margin of error to warrant executing the trade. But $250 would easily.
There are asset specific things to consider at all times. Some assets move more quickly than others, and this is something to always keep in mind. The NASDAQ has historically moved upward, and it is not that uncommon to see movement of more than 1 percent in a day. On April 1st, this index increased by 1.64 percent, or about $69. This was a big day, but it still wouldn’t have been enough to trigger the high yield option explained above. Is such change possible two days in a row? Of course it is! Is it likely? That’s a tougher question, especially because of where the market is right now. Less than a month ago, the NASDAQ hit an all time high and then began to drop off. If this current increase is headed back to that high point, then big movement is likely. But again, this is tougher to predict. The S&P is at an all time high, but these indices are comprised of different stocks and sectors.
The example that I’ve been referring to indicates that the NASDAQ needs to hit 4,360. That would put the index at the highest point it’s ever been at. Historically, investors and traders have been skittish at this point, but over the last few months, a lot of this hesitation has disappeared. So a high yield option here could have a huge return for you, but the odds are against you being successful in this particular instance.
In order to be successful in the future, you need to look at the asset and its current state, its recent past, and its long term history. Take a snapshot of the surrounding areas of the market, and then move cautiously. These have high returns, but you do need to be right once in a while to make them worthwhile.