A History of Binary Options

history of binary options industry

Global Financial Crises

The History of Binary Options starts off with the almost non-existent regulatory framework for the binary options industry in 2007. There were no laws and there was no separate financially liquid market for binary Options. Traders were only offered fractions of larger more complex contracts. That is how things stood until the sub-prime mortgage market crisis and the crash of real estate values in 2007 in the US. The binary options industry was born in 2008 on the floor of the Chicago Board Options Exchange (CBOE), which had been established established in 1973. The financial crisis led to calls for investment with a lower risk profile of course and this was the situation that gave rise to the binary options industry in the beginning. However, this was not to be confined to the rich and institutional investors only, but was soon made available to ordinary folk who want to make profits from the financial markets.

The year 2008 was a disaster for the global financial system. Banks such as Bear Stearns and Lehman Brothers were declared bankrupt. Every day that year companies and individuals were counting capital and investment losses amounting to millions. Stock markets tumbled, the Dow Jones Industrial Average, for example, fell from 14,000 to 11,000 points in the space of ten months. The sub-prime mortgage scandal in the US showed that the blame for the 2008 financial crisis belongs to those who regard real-estate, and particularly housing, as a profit generator – rather than a home. Binary options trading has grown in popularity and success because it is a profit generator which anyone can use.

Regulatory Reform

The Options Clearing Committee (OCC), which had been developing the regulatory framework since the 1970s, proposed reforms which were aimed at elevating the binary options industry and to make it possible for assets to be traded in the chief exchanges. The US Securities and Exchange Commission (SEC) recognized the virtues of the OCC’s recommendations for reform and made it possible for binary options to be offered as a legitimate financial instrument. The American Stock Exchange (AMEX) began offering binary options to the public in June 2007. The CBOE now has a yearly trading volume circa 1.3 billion contracts.

History of Binary Options and Developments in IT

Developments in information technology have been an engine of progress for the growth and success of the binary options industry. Online trading platforms have become more sophisticated, and Apps for cell-phone based trading have become more popular with increasing availability. All of these developments add up to greater flexibility of access to the markets for the binary options speculator of course because it means traders are no longer limited to ‘where’ and ‘when’ they can make their binary options contracts.

Today we can place ‘’call’’ and ‘’put’’ contracts on asset prices for a huge spectrum of stocks, commodities and currency values. As well as this, the markets themselves have come under the binary options finger with traders now being able to place binary options contracts on the total points movements of market indices. Stern Options clients, for example, can speculate with binary options contracts on the twenty major indexes, including the NIKKEI; FTSE; HANG SENG and DAX.

Contract Typology.

Contract types have evolved too, and traders are now able to choose the timeframe for binary options contracts.  Stern Options’ trading platform offers Intra Day contracts; Short Term contracts for 60 to 300 seconds; Long Term contracts for periods of days, weeks and months, and that is not all!

Customer Support & Guidance.

Where contract types have developed exponentially in scope and frame, customer support systems have developed in terms of the ways they can be contacted. As a Stern Options account holder, for instance, I can contact their multi-lingual customer support team 24/7 by phone, email and online chat. Which is great, because I can not only rely on them to be there when I need them, it also means there is somebody available all the time to answer any questions I want to ask or for any professional help I need.

To top it all, Stern Options give all their clients free-to-use fully comprehensive online binary options training materials.  The educational menu covers the binary options theory and practice , with video based instruction, eBooks, demos and the Economic Calendar. Which prompts the question, ‘What is the future for binary options?’. One thing is certain, I am sure, there will be more people using it and binary options trading is destined more and more to become a primary source of wealth creation for ordinary folk like you and me as well as the institutional speculator.

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