What is a No-Touch Option in Binary Trading? | Definition & Example


A no-touch option in Binary Options is a trading method where traders predict that the price of an asset will not reach a predetermined value within a specified time frame. In contrast to a one-touch option, which bets on the price reaching a specific level, the no-touch option anticipates the opposite outcome.

Similar to call and put options, no-touch options offer two possible outcomes, with fixed profits and losses. Traders profit if the price remains below the set threshold the entire trading period, resulting in substantial profits. However, if the price does touch the set threshold at any point during the trading period, traders will lose their investment.

No-touch Option in a nutshell

  • No-touch option predicts the asset won’t reach set value in a specified time.
  • Offers fixed profits if price stays below threshold throughout trading.
  • Traders lose investment if price touches threshold.

When is the No-Touch Option Trading Strategy used?

The no-touch trading method is generally used when the market is about to consolidate. For a successful no-touch trade, you need to build a good strategy by examining changes in the market and the previous price movement of a particular asset. 

Using your binary options trading knowledge and the information, you can develop a no-touch trading strategy that can work in your favor—meaning, a strategy that can help you earn a considerable profit

Example: How to trade a No-Touch Option?

To trade a no-touch option, you have to select an asset. Let’s consider trading binary options with a no-touch approach using silver as the asset, with the current spot price at $25 per ounce.

  • You set an upper limit at $28. If the price stays below $28 until the trade’s expiry, it’s profitable. But if it reaches or exceeds $28, the trade closes out of the money, potentially causing losses.
  • Alternatively, you could set a lower limit, say $22, predicting silver won’t drop below this before expiry. If it touches or falls below $22 during the trade, it closes out of the money.

Why are No-Touch Options used by traders?

No-touch options are used by traders because they offer a large payout, which allows them to make a huge profit. But without proper market knowledge, you won’t be able to analyze the market trend correctly. And you will end up losing the trade. So, before choosing the no-touch option, create a successful strategy. 

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About the author

Marc Van Sittert
Marc Van Sittert is an experienced Binary Options Trader and coach who is originally from South Africa. He started his career in 2014 by trading old-school Binary Options online. His main focus is on short-term contracts with 60-second trades.

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