Touch Binary Options and Barrier Options

BinaryOptionsNow | Published on March 21, 2011 at 11:44 am

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BinaryOptionsNow – If your thirst for binary option investments flows into the weekends when the majority of markets and indices are closed, I have good news.

Traders interested in investing in binary options on the weekend do have options – no pun intended. The majority of binary option brokers offer touch or barrier binary options for purchase on Saturday and Sunday that payout up to a 500% on investment.

What are Touch Options?

Touch binary options also known as barrier options are all-or-nothing financial options in which the trader receives a fixed payout if the option’s underlying financial asset “touches” or surpasses a pre-determined value or “barrier” and nothing if the asset does not reach or surpass this value.

Touch binary options are offered on various financial assets including stocks, stock indices, commodities and forex pairs although typically the most common underlying asset for barrier options are shares of stock.

Here is an example of how barrier options work:

On Saturday, Trader A invests $500 in a Google stock binary option with a $600 barrier that pays out 300% and expires on Monday at 1:00 PM EST.

If Google stocks trades at or above $600 per share at any time by Monday at 1:00 PM EST, Trader A receives a payout of 300% on his $500 investment – $1500 – making $1000 in profit.

If Google stock does not reach or go beyond $600 per share in trading by Monday at 1:00 PM EST, Trader A loses his initial investment.

Touch options are also offered during the week for those interested.

The benefit of these types of binary option investments is the larger than usual payout. Whereas typical Up/Down or Range (also referred to as Boundary) binary options offer payouts of less than 100% – typically 65%-85% – touch binary options always payout between approximately 300% – 500%.

Keep in mind that the larger payout percentage is obviously a product of that fact that these financial instruments carry more risk of losing one’s initial investment than standard binary options.

Binary Options Brokers offering Touch Options

Here is a brief list of the touch/barrier binary options available for purchase via the major online binary option brokers:

AnyOption – Offers approximately 10 weekly touch binary options for purchase between Friday evening and Sunday evening (GMT) that expire the following Friday. The rate of return on AnyOption touch binary options can reach up to 380%. AnyOption does not offer barrier options for purchase during the week.

TraderXP – Offers 5-10 touch binary options on the weekends as well as during the week. Rates of return for TraderXP touch binary options can reach up to a massive 500%. Expiry times for TraderXP touch binary options vary.

OptionBit – Touch options are available for purchase throughout the week as well as on the weekends. OptionBit touch binary options are available in two formats during the week: Regular payout (75% – 85%) touch binary options that expire hourly and high payout (350% – 500%) barrier options that expire at the end of the trading day.

StartOptions – Offers barrier options that payout up to 300% that can be purchased on weekends.

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