Binary options history begins with the development of many financial products that are created to attract people to investments by simplifying the trading process and the decision making.
The exotic options called binary options are traded regularly for years in other forms of trading but made available to the public and through brokers only a few years ago.
The following paragraphs provide you some understanding of the binary options history and can be used to broaden your perspective about binary options.
Binary options history – regulation
The beginning of the short history was in 2007 when the Options Clearing Corporation proposed to regulate binary options trading. The proposal was sent to the Securities and Exchange Commission which in turn approved and regulated binary options trading in 2008.
Binary options history – binary options products introduction
May 2008 was the first introduction of regulated binary options by the American Stock Exchange ( AMEX ). The binary options products they launched were European style cash-or-nothing options which means that these were binary options with a monthly expiry and about 3.5 weeks of available trading. The prices were calculated using the Black-Scholes formula and were very static in nature. In June 2008, the Chicago Board Options Exchange ( CBOE ) also introduced binary options as part of their offering to financial institutions and companies.
Both AMEX and CBOE issued binary options with a value which was between 0$ to 1$ with a multiplier of 100 as the base binary options. Getting quotes on binary options was a complex matter and could take even a day and therefore in order to be profitable to the issuers of the options, they only accepted big deals of large amounts. It became clear that this fascinating new tool that was used by the professionals needs to evolve and to be introduced to the public as a standard regulated simple way to trade.
Binary options history – introducing binary options to the public
2009 was the year when the desired development occurred in. The North American Derivatives Exchange ( NADEX ) introduced binary options tools that enabled the continuous pricing of the options and the automatic selling of over the counter binary options. This major development was available through NADEX’s on-line platform. Not long after, many broker companies started to sell over the counter binary options with continuous pricing through automatic on-line platforms and the binary options market evolved to where it is now with dozens of brokers and millions of traders creating a volume of hundreds of billions of dollars a month.
To read more about binary options history you can read the article in Wikipedia
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