Double One-Touch Option

Can you Double Dutch? Eh...that's a jumprope thing. Also, do not see: Double Dutch Oven.

Ok, so then maybe you can double one-touch. A double one-touch option is a binary option, which means you either win it all or get nothing...no in-between. The buyer and the seller of the option negotiate upper and lower price limits called the “barrier levels.”

As the buyer of a double one-touch option, you’re betting that the asset underlying the option will be a rebel and jump over the barrier levels by a predetermined date. The price of the underlying asset must go above or below the barrier levels to receive the payout. If it doesn’t, there’s no payout, and the buyer just loses the money it cost to set up the transaction.

If you’d rather bet the asset of an underlying option will stay within a range than leap out of it, you can bet on a double no-touch option, the goodie-two-shoes sibling to the double one-touch option.