The cornerstone of binary options trading is the assumption that the price of the underlying assets will appreciate about a certain value, or sink below specific limits at the expiration time. Traders need to factor in various elements before opening a position, because the price needs to advance into the right direction and stay there until after the expiration date. One touch options are different because they enable the trader to cash in at any time during the option's life if the price surpasses the predetermined limit.
Pros of binary options one touch trading
One of the main advantages of trading one touch options is the sheer simplicity of this process, which makes it suitable for beginners. All you need to know is that the price of the underlying assets will touch or exceed a barrier, and there are only two possible outcomes. Another reason for trading one touch options is that they can offer high return on investmentand with payouts that come close to 500%.
Those who use fundamental analysis a lot, can predict the surge of the price after the significant event, and this is enough to make profits even if the price doesn't last. Binary options one touch trading is also suitable for those who aim smaller gains, in exchange of decreased risks because the limit that the option can touch can be set at relatively low levels.
Cons of binary options one touch trading
Unlike most binary options, one touch once are available only from Friday to Sunday after trading hours and have to be seized until the conclusion of the following trading week. They are a bit restrictive and don't allow the same flexibility that many binary options traders take as granted, which makes it a bit difficult to build an entire strategy around them.
Furthermore, these types of options are only profitable during times of relative volatility, when the prices are more likely to move outside their normal patterns. Most underlying assets are moving between fairly restrictive limits, and traders take their chances when predicting that they will exceed, or at least touch these upper or lower limits.