The History of Binary Options

Binary options may have only become an extremely popular financial instrument in 2008, but binary options trading has been in existence for over four decades. Much like the transition undertaken by the Forex market in 1997, prior to 2008, binary options were only traded by large financial institutions in closed markets. Due to this, they comprised only a small percentage of the rapidly evolving derivatives market that they represented. Today, binary options are available to everyone and have a daily trading volume of nearly $500 billion, making them tremendously popular on a global scale. Thanks to certain fundamental changes over the past 40 years, binary options can now be traded by anyone with a desire to earn considerable profits in the lucrative world markets.

The Chicago Board of Options Exchange, commonly referred to as the CBOE, has played a vital role in making binary options trading as popular and widely available as it is today. Under direction from the Board of Trade, the CBOE’s formation has taken binary options from the institutional shadows to a wildly popular type of over-the-counter transaction. During its formative years, binary options were not regulated or standardized, but over the years it has become a highly regulated and standardized investment vehicle. It was these changes that led to its inclusion into the trading portfolios of several world markets.

Unfortunately, lack of regulation plagued binary options for quite some time. However, many of these challenges were overcome with the formation of the MarketOptions Clearing Corporation. The OCC provided traders with clearer instructions and greater transparency, which was instrumental in allowing this now popular form of investment to gain the respect it needed to appeal to individuals on a massive scale. In addition to these changes, guidelines detailing trader conduct were also established. With these guidelines, anyone trading in an unethical manner are now banned from participating in this simple and profitable trading environment.

Despite these necessary improvements, binary options trading activity still only comprised a miniscule percentage of global trading activity. This all changed in 2008, which was the monumental year that the SEC accepted the proposals submitted by the MarketOptions Clearing Corporation. Once accepted by the SEC, binary options quickly became a popular form of retail investment in the major markets of the world. Binary options were first offered on the American Stock Exchange, but the CBOE quickly followed, making them available to the general public. While they were largely unknown to the public just a few short years ago, binary options are now traded by thousands of individuals who are attracted to their simplicity and profit potential.

The introduction of rules and regulations in 2008 are only partially responsible for the widespread popularity of binary options. Many are drawn to their transparent nature, which leads to less speculation and a greater chance of success. Although the fundamentals of binary options have changed little over the years, major improvements to how trades are performed have been introduced. Thanks to technological advances, traders can now execute a large variety of trades via intuitive online trading platforms, tablets, and even smart phones from anywhere in the world.