A type of binary option that pays a fixed return if the underlying asset does not reach or “touch” a specified price level (barrier) during the life of the contract. This instrument is commonly used in foreign exchange and other derivative markets to express a view that a certain price level will not be breached before expiration. 

This option has only two possible outcomes: a predetermined payout if the barrier is never touched, or nothing if the barrier is breached at any point before expiry. It is a form of exotic option and is favored for strategies based on range-bound market expectations or low volatility scenarios. 

For example, if a trader believes that EUR/USD will not rise above 1.1200 in the next week, they might buy a no touch option with that level as the barrier. If the exchange rate stays below 1.1200 for the entire option period, the trader receives the full payout. If it reaches or exceeds 1.1200 even once, the option expires worthless. 

No touch options offer a defined risk-reward profile and are often used in combination with other barrier options to construct structured products or hedging strategies. However, their pricing is highly sensitive to volatility, time to maturity, and proximity of the current price to the barrier, requiring careful modeling and monitoring.