Touch Options: An Alternative Approach To Binary Options Trading

OptionBit, the leading low-cost binary options trading platform, recently launched its Touch Options functionality to the public, becoming the second leading binary options platform Anyoption to provide touch options capabilities. So what exactly are Touch Options, how can you trade them, and why do we believe including Touch Options trading into your binary options gameplan can yield fantastic results?

Touch Options Overview

In general touch options trading refers to the ability to place a trade on a specific asset as to whether or not the asset ever ‘touches’ a predetermined level at any point over a given time frame.  Similar to standard binary options trading, the trader picks whether he/she believes the asset will move higher or lower but instead of generating profits or losses on whether the asset strictly moves higher or lower from the point the trade was made, the binary options trader only gets paid if the asset touches the pre-determined strike which is a pre-determined distance away from the current price. Currently touch options are available with daily expirations at OptionBit and with weekly expirations at Anyoption. For the purposes of this report we will focus on daily touch options trading available at OptionBit.

Touch Options Trading At OptionBit

OptionBit

To trade touch options on the OptionBit platform simply select the Touch tab on the top header of the home page. Next select the asset class you’d like to trade. As of mid-August 2010 OptionBit only provides touch trading on currencies though the company intends on rolling out touch trading on all assets over time. Once you’ve selected the currency pair you’d like to trade, the OptionBit platform will provide a ‘Touch Up’ high strike and a ‘Touch Down’ low strike for you to choose from. These strikes change as the current spot price changes to maintain a consistent distance from current levels. Similar to the standard High/Low hourly binary options, the daily touch options lockout 5 minutes before each hourly expiration, but maintain a daily expiration for profit/loss purposes. In other words, you can place a touch options trade during any hourly expiration cycle but your trade isn’t determined to be a winner or loser until the final end-of-day expiration. Currency touch options on the OptionBit platform currently yield returns of 191% for winning trades and return nothing for losing trades.

Touch Options Advantages

The beauty of touch option trading lies in the ability to trade around these daily positions by placing hourly trades on the same asset. Thus you can make a daily trade on the EUR/USD rate early in the morning expecting the rate to move higher, realize a couple hours in that you’ve made a bad decision, and trade your revised thesis using the hourly options on the same EUR/USD pair. While you can use similar hedging techniques on touch options as we’ve discussed on the standard hourly options, the interaction between the hourly and daily options opens up a whole new realm of binary options trading strategies that we intend to explore in detail over the coming weeks. In the meantime check out the OptionBit Touch Options trading functionality and take your binary trading activities to a whole new level.

Next time in Lesson 8 we explain in detail Why You Need To Trade Options Expiration

Special Promotion:

Current promotions offered for subscribers of the Binary Options Weekly are listed on the right side panel. We’ve arranged for higher deposit bonuses when registering for the various platforms through this site. Check the bonuses offered here versus what is offered through the individual sites and you will see first hand the best deals are here. OptionBit is currently offering 20% bonuses on deposits of $1,000, 25% bonuses on deposits of $2,000, and 30% bonuses on deposits of $5,000. To register for the OptionBit platform and collect your deposit bonus click the Bonus button below:

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