Double No-Touch Binary Options Explained

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Double No-Touch Binary Options Explained

With the double no-touch binary option trade, the binary options trader selects a set of strike prices above and below the current market price as well as an expiration time. The broker will offer him a payout percentage corresponding to his selection.

For the investment to payoff, the price of the underlying asset must not hit either one of the strike prices once before the option expires.

Payout will vary greatly depending how far away is the strike price and the time till expiration. The further away the strike prices, the lower the payout. The longer the expiration time, the higher the payout as one has more time to hit the target.

Double No-Touch Binary Options Explained

Unlike the common high-low variant where the payout rarely exceed 90%, the payouts for one touch binary options can easily exceed 100% and payouts between 200% to 500% are not uncommon.

It is entirely up to the trader how much he wishes to invest with each purchase of the binary option but the minimum and maximum he can put in with each option varies across brokerages.

Double No-Touch Binary Option Example

EUR/USD is currently trading at $1.30. A binary options brokerage is offering 50% payout for a double no-touch binary option that expires in 5 minutes which has an upper price barrier of $1.31 and a lower price barrier of $1.29.

After tracking the price movement of EUR/USD for the past hour, the binary option trader believes that the underlying price movement has little volatility and will not hit either the $1.31 or $1.29 price barriers within the next 5 minutes. He decides to invest $100 to purchase this double one-touch binary option.

If EUR/USD goes up to $1.31 or down to $1.29 anytime within the next five minutes, the trader will have lost his initial investment of $100.

However, if the price of EUR/USD never rise to $1.31 or drop to $1.29 during the whole 5 minutes, the investment pays off and the trader earns a profit of 50% of his initial investment, which is $50.

Double One-Touch Binary Option

Conversely, there is the double one-touch variant as well. See Double One-Touch Binary Options.

Continue Reading.

What are the Main Types of Binary Options?

Learn how the One-Touch, No-Touch and Range/Boundary binary options differ from the common high-low viety and how to trade them. [Read on. ]

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  • Binomo
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What Assets can be Traded using Binary Options?

Many of the most popular financial instruments such as currency pairs, equities and commodities are available to trade using binary options. . [Read on. ]

Binary Options: Trading or Gambling?

Is binary option a legitimate financial instrument or just another form of gambling. [Read on. ]

Binary Options & Trading Robots: A Perfect Match?

Unlike humans, robots have no emotion and do not need to rest, so they can make a lot more trades than humanly possible, combined with perfect consistency. [Read on. ]

Is Binary Options Trading a Scam?

Learn how you can get scammed when trading binary options if you are not careful. [Read on. ]

How to Select a Binary Options Broker?

With so many scam brokers out there, before you learn how to trade, one must know how to separate the wheat from the chaff and find a trustworthy binary options brokerage. [Read on. ]

Binary Options: Calculating Breakeven Win-Rate for a Given Payout

How often does my trades need to be successful in order to be consistently profitable in the long run when trading binary options. [Read on. ]

Double One-Touch Binary Options Explained

With the double one-touch binary option trade, the binary options trader selects a set of upper and lower price barriers above and below the current market price in which he thinks the price of the underlying asset will hit before the option expiration time. The broker will offer him a payout percentage corresponding to his selection.

For the investment to payoff, the price of the underlying asset only needs to hit either one of the price barriers once before the option expires.

Payout will vary greatly depending how far away the barrier prices are and the time till expiration. The further away the barrier prices, the higher the payout. The longer the expiration time, the lower the payout as one has more time to hit the barriers.

Unlike the common high-low variant where the payout rarely exceed 90%, the payouts for double one-touch binary options can easily exceed 100% and payouts between 200% to 500% are not uncommon.

It is entirely up to the trader how much he wishes to invest with each purchase of the binary option but the minimum and maximum he can put in with each option varies across brokerages.

Double One-Touch Binary Option Example

EUR/USD is currently trading at $1.30. A binary options brokerage is offering 200% payout for a double one-touch binary option that expires in 5 minutes which has an upper price barrier of $1.31 and a lower price barrier of $1.29.

After tracking the price movement of EUR/USD for the past hour, the binary option trader believes that the underlying price movement is rather volatile and will hit either the $1.31 or $1.29 price levels within the next 5 minutes. He decides to invest $100 to purchase this double one-touch binary option.

If EUR/USD goes up to $1.31 or down to $1.29 anytime within the next five minutes, the investment pays off and the trader earns a profit of 200% of his initial investment, which is $200.

However, if the price of EUR/USD never rise to $1.31 or drop to $1.29 during the whole 5 minutes, the trader will have lost his initial investment of $100.

Double No-Touch Binary Option

Conversely, there is the double no-touch variant as well. See Double No-Touch Binary Options.

Continue Reading.

What are the Main Types of Binary Options?

Learn how the One-Touch, No-Touch and Range/Boundary binary options differ from the common high-low viety and how to trade them. [Read on. ]

What Assets can be Traded using Binary Options?

Many of the most popular financial instruments such as currency pairs, equities and commodities are available to trade using binary options. . [Read on. ]

Binary Options: Trading or Gambling?

Is binary option a legitimate financial instrument or just another form of gambling. [Read on. ]

Binary Options & Trading Robots: A Perfect Match?

Unlike humans, robots have no emotion and do not need to rest, so they can make a lot more trades than humanly possible, combined with perfect consistency. [Read on. ]

Is Binary Options Trading a Scam?

Learn how you can get scammed when trading binary options if you are not careful. [Read on. ]

How to Select a Binary Options Broker?

With so many scam brokers out there, before you learn how to trade, one must know how to separate the wheat from the chaff and find a trustworthy binary options brokerage. [Read on. ]

Binary Options: Calculating Breakeven Win-Rate for a Given Payout

How often does my trades need to be successful in order to be consistently profitable in the long run when trading binary options. [Read on. ]

Double No-Touch Binary Options

You will learn about the following concepts

  • Introduction to double no-touch binary options
  • How do they work
  • How no-touch options differ from call/put options
  • Examples

Introduction

Having explained how most of the other types of binary options work, we will now turn our attention toward double no-touch options. They are the exact opposite of double one-touch options. You again have two trigger levels, one above and one below the spot price, but here the price should not reach them, otherwise the option will be “out of the money”.

How do double no-touch binaries work?

When a person trades double no-touch binary options, he/she must select two price barriers, as well as a time period during which the trade will be active. Some brokers offer options with predefined trigger levels and expiry period.

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In order for the option to expire “in the money”, the underlying price of the asset must not touch either one of the price barriers. If it does, the trade will close out of the money.

Why double no-touch options?

Double no-touch binary options are commonly purchased when traders are convinced that the market is about to consolidate in a trading range, which often comes after hitting a new swing high or low. These options are usually traded by more experienced traders, but in certain situations even beginners can take advantage of the trading opportunities they offer.

Example

Let us assume that gold spiked to a new high of $1 280.00 and consolidated at around $1 275.00 following a correction. The trader expects that the precious metal will probably hold around these levels at least for the next one hour, because, for example, there are no other major economic indicators due to be released today.

The trader decides that this is the right time to purchase a double no-touch option with an expiration time of one hour, and an upper and lower barriers at $1 281.00 and $1 269.00 per ounce, respectively. If the yellow metal fails to rise or fall to these set barriers within the next hour, and instead reaches for example a high of $1 278 and a low at $1 272, then the option will become “in the money”. Logically, touching any of the two trigger levels will render it “out of the money”.

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    Binarium

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    Free Demo Account!
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  • Binomo
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    Good Choice For Experienced Traders! 2nd place in the ranking!

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