History of Binary Options
Binary options trading has been around for a while, but in the past it was treated as an “over the counter” (OTC) transaction, with practically no regulation. Only in 1973 when the CBOE (Chicago Board Options Exchange) was constituted, were regulations set out for a trading options platform. We can say that the CBOE was the first options trading environment, and it is still the largest among the many other markets around the world which have added digital options to their portfolio.
In 2008, the US Securities and Exchange Commission (SEC) approved a rule change by the Options Clearing Corporation that effectively allowes traders to use binary options as a regular investment vehicle. Since then, we have seen an explosion of online binary option brokers.
Within a short time afterwards, internet based binary options brokers began to operate. Unlike exchange trading, online binary options trading is a contract between the company and the buyer of the binary option, not an option bought and sold between investors through a central exchange. Surprisingly many of the online binary options companies which began operations in recent years chose to do so without becoming properly licensed and regulated in advance of launching their trading platforms
One great benefit of binary options is that they have a short trading time frame and their payouts have no extra hassle. The short time frame is dependent on the investor, though there have been trades that lasted from 15 minutes to more than a month. The simple payout offers an attractive option to most traders, as more of them move towards one-hour binary options. However, if the trade flops, losses can return as much as 0% to 15% of the initial capital.
Binary Options are a legitimate way to trade, one which is still in its infancy and will continue to grow and make very large profits for many traders for years to come.