Double one-touch

Posted by Scriptaty | 12:39 AM

The double one-touch option allows you to select two strike-price barriers and provides a payout if either one is touched. If the Euro/U.S. dollar (EUR/USD) spot was trading at 1.3000, you could buy a double one-touch with 1.2900 and 1.3100 strikes expiring 48 hours forward. If EUR/USD either rose to 1.3100 or declined to 1.2900, you would make a profit. The double one touch is similar to a standard long strangle or straddle option trade in that it is a good tool to use when you have no strong opinion about direction but you expect volatility to explode.

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