Touch Options and Boundary Options

The foreign exchange market is now more opened and more accessible than ever. If in the early days on the forex market only institutions like central banks and major financial companies could trade, nowadays any individual interested in forex can actually trade.

The forex market is now the largest and one of the most dynamic markets in the world. A daily turnover of around $4 trillion speaks for itself showing how huge is the foreign exchange market. During the financial crisis that swept the world in the past few years, the forex market wasn’t affected. On the contrary it continued to grow.

The online forex industry also continues to grow as the supply and the demand are both increasing. On one side the number of online trading platforms is growing, while on the other side the number of individuals interested in forex trading rises fast.

The new binary options form of trading is even more appealing than the old classic form of forex trading. Trading binary options is much easier, the profits are higher and the time frames are very short. These are just few of the special features that make binary options so attractive for both amateurs and experienced forex traders.

Touch options and boundary options

Currently the online trading platforms offer only one form of trading whether is forex trading or binary options trading. Seeking the diversification of their offer some binary options brokers created new forms of binary options such as touch options and boundary options.

The touch options and boundary options are even easier to trade and most of all they have shorter time frames. The touch and boundary options profitability is as high as for the binary options but the shorter expiration times and the ease of trading makes them the best choice for traders with no time to waste on elaborate analysis.

For now only a few brokers offer touch and boundary options but the high popularity earned in such a short time will definitely encourage others to follow this trend.

Touch options features

In touch options a target price is set so the trader only needs to choose whether the market price will touch that target or not. The target price could be a higher value, so the price would need to increase to touch the target or a lower value which implies the price to decrease enough to touch it.

The time frame is also set by default and usually is short, ranging from few minutes to maximum few days (by the end of the week). Remember the time frame when you select your TOUCH / NO TOUCH choice.

To trade touch options you only have to follow these three steps:

1. Choose the asset: there are many options to choose from including currencies, commodities, stocks and indices.

2. Select your choice TOUCH – if you think the market will reach the target price within the time frame, or NO TOUCH if you sense that the target will not be reached;

3. Enter the amount and click on the “buy button”: once you enter the amount you will have the return on investment calculated for both situations, if your option ends in the money (you win) or out of the money (you lose).

Boundary options features

For the boundary options an interval is set for the price. The trader needs to choose whether the price will close within the interval (IN) or outside the two limits (OUT). If you choose OUT, it doesn’t matter if the price at expiration it’s upper or lower the interval, it only needs to be out of it.

Same as the touch options, the expiration time is also set by default so you only need to check it out in order to take it into consideration for the IN / OUT decision.

Boundary options trading steps:

1. Select the asset you prefer: most brokers offer boundary options for currency pairs, stocks, commodities and indices.

2. Choose IN or OUT: now you need to decide whether the price will be inside the interval or not at the expiration time. The live market price, the upper price limit and the lower price limit are displayed and a live chart with the three values will appear to help you see better the market situation.

3. Write the amount of money you wish to invest in the option and you will see the payouts according to the outcome. If you are satisfied with your choice click “buy” and you’re done.

Author: Mihaela Florea