A One-Touch Option is a type of financial derivative that pays out a premium to the holder if the spot rate reaches or surpasses the strike price at any time prior to expiration. This type of option can be used as an insurance policy against potential losses in volatile markets, and it provides investors with greater flexibility when managing their risk exposure.The main advantage of this type of option is that it allows investors to benefit from market movements without having to actively manage their positions on a daily basis. If the spot rate rises above or falls below certain predetermined thresholds, then they will receive their payout regardless of how long they have held onto the position for. This gives them more freedom and control over how much risk they are willing to take on while still being able to capitalize on positive market movements when possible.Furthermore, since there is no need for active management throughout its duration, these options also provide cost savings compared with other types of derivatives such as futures contracts which require constant monitoring and adjustment by traders in order for them not expire worthlessly due changes in prices during its lifetime .In conclusion , one touch options offer many advantages over traditional derivatives such as futures contracts including lower costs associated with trading , less frequent adjustments needed during its life span and better protection against potential losses arising from sudden unexpected changes in prices . Therefore , these products represent an attractive alternative investment instrument especially suitable for those who prefer passive strategies but still want access potentially profitable opportunities presented by markets around world.
