One Type of Binary Option
There is a type of binary option called the touch or no-touch binary option. What does this mean? The no-touch option is a very easy one to understand and to use. What the no-touch option means is that the person predicts that the gold, stocks or other items won't reach a certain price during the time period that has been established. If the gold or other item does reach the predetermined value before the time that has been set as the closing, then you don't get anything back on your initial investment or get additional earnings.
More on the No-Touch Option
This type of binary option can, of course, be risky. You are trying to predict what will happen to the market and you're saying that something won't happen - instead of the usual which is to say that something will happen. The profits are larger if the time period is longer and if the risk is more significant. So, if you predict that the price of gold won't reach a certain amount over this one hour, you'll make less if you are correct then if you say that it won't reach it over the next week.
The One Touch Option
Now, the opposite type of binary option is the touch option, or the one-touch option. This occurs when you invest in the idea that the gold, stock or other asset will reach the predetermined amount - or even exceed it. When you do this type of touch binary option, you have to predict what number or amount the gold or other item will reach and when it will reach it. So, you have to say that gold will be worth a certain amount by the end of the next 24 hours.
Results with the One Touch Option
Now, there are two main outcomes that can happen with the one touch option in binary option investing. If the value that you established isn't reached by the time that you set up, then you lose the full amount of the premium. However, if the amount is reached, then you get a pay-out as soon as that predetermined amount is hit. The idea with the touch option is that the asset "touches" or goes over the predetermined amount that you've established. This is, of course, why it's called a touch option.
Payouts with Binary Options
The touch options tend to have very worthy payouts. They offer a large return on the investment when you predict what will happen correctly, and for this reason many people enjoy investing with touch options and no-touch options.