A type of exotic option in which the holder receives a payout once the price of the underlying asset reaches or exceeds a specific level or barrier. The holder of a one-touch option is entitled, at the outset of the option contract, to set the position, the time to maturity and the payoff once the option touches the barrier. In case the barrier is not reached, the holder receives nothing, and therefore loses the premium paid to the option writer.
The one-touch option is also called a lock-in option, touch digital or binary option.
