This type of option is useful for traders who believe the price of an underlying asset will undergo a large price movement, but who are unsure of the direction. Some traders view this type of exotic option as being like a straddle position, since the trader stands to benefit on a calculated price movement up or down in both scenarios. This type of option is growing in popularity among traders in the forex markets.
For example, assume the USD/EUR rate is 1.20 and the trader believes that next week's economic numbers will greatly affect this rate. A trader can use a double one-touch option with barriers at 1.19 and 1.21 to capitalize on this outlook. In this case, the trader stands to make a profit if the rate moves beyond either of these levels before expiry, and he/she stands to lose the premium if the rate remains within these barriers.