Published On: Mon, Apr 8th, 2013

No touch option

This option is favored when an investor does not expect the underlying asset to hit the target price point at any time during the expected time frame.

Usually, a no touch option offers a 75% return if the underlying asset refrains from hitting the price point.  However, should the price point be achieved at any point during the predetermined time frame, the option is automatically expired out of the money, with a 15% refund on the investment.   A one touch option gives the investor the opportunity to decide  if the underlying asset will hit the price point or not during a pre-set time frame for the option.  A touch option allows the investor to predict if an asset price will hit a specific strike price before the option expires.

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About the Author

- Marcus Holland has been trading the financial markets since 2007 with a particular focus on soft commodities. He graduated in 2004 from the University of Plymouth with a BA (Hons) in Business and Finance.