What is a “One-Touch” Option?

[RTFX-Trading]

What is a “One-Touch” Option?

This type of exotic option allows the investor to define:

The Position of the barrier (strike)
The time of expiration (maturity)
The amount receivable (payout)

The investor pays a premium (premium) which gives him the right to receive the full payout if the price of the barrier (strike) is breached by the end of the time of expiry (maturity).


For example, an investor buys an option EURUSD "One Touch" strike 1.5000, maturity three-months, €100,000 payout, at a 20% premium.

The holder of this option:

1. Loses the option premium if by the expiry of the option, the spot price of the underlying currency pair does not reach the price of the barrier, resulting in a loss of EUR 20,000.

2. The cash amount to be received if by the expiry of the option, the underlying price reaches the barrier, would amount to €80,000 (€100,000 payout - premium €20,000).

3. May at any time request a quotation for this option and close.


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