And history of binary options brokers
The first binary options were only an option for the wealthiest individuals; it was in direct response to this that the OCC allowed binary options to be traded on the stock exchange. This was approved by the US Securities and Exchange Commission in and the concept of binary trading, in foreign and domestic markets became possible.
The American Stock Exchange started to allow binary options in the same year and became the first international exchange to do so. The ease of access to the internet, combined with a range of new tools and dedicated platforms, quickly made it possible for almost anyone to trade in binary options. The result was a rapid growth in this type of trading. The same period saw a growth in the types of options, contract types, assets types and even the range of contract times. The internet made it possible to trade in very short time frames, as well as the more traditional longer frame.
In turn this has opened up the marketplace and allowed a host of brokers to emerge offering their services. By there was a mini revolution in the industry which ensured that binary trading was more user friendly. There were a string of changes to the risks and rewards, which has resulted in the binary options trade possible today. The advancement of mobile platforms has also made it possible for anyone to trade in binary options no matter where they are in the world.
Modern society has now embraced this type of trading as they recognize the potential in its flexibility, ease of use and the ability to always know your maximum profit and loss figure. All of this can be achieved with a far lower deposit than it requires to start trading on the main stock exchange. Providing you adopt a cautious and educated approach it is possible to gradually increase your profits whilst reducing your risk; all with the aid of binary options.
There is a wealth of opportunities within a few clicks of your mouse; it is this which has made it possible for anyone to understand and trade in binary options; eve from the comfort of their own home. There is still a certain amount of distrust in the binary options market. This was what led to the entrance of binary options trading as a new form of investment for the average trader. Even though binary options gained mainstream popularity in , it has actually been around for quite some time.
In years gone by, binary options were a semi-official investment product, open only to banks, other institutional and high net-worth investors in the Over-the-Counter OTC markets.
In essence, the situation with binary options was not much different from what obtained with forex trading prior to when that market was deregulated. In order to understand when the practice of trading binary options actually started, we would have to go back almost 40 years, to when options trading on financial instruments commenced on the newly created CBOE. These early days were difficult as the regulatory framework for trading options were not yet developed.
Over the years, binary options trading evolved as a less complicated way of trading options. They were still offered as part of larger and more complex contracts, and as mentioned earlier, there was no regulation whatsoever for binary options.
There was still no separate liquid market for trading binary options. These conditions existed until By this time, the subprime mortgage crisis had begun to play out with the collapse of real estate prices. The Options Clearing Committee OCC , which had been created in the early 70s to develop the regulatory framework for the options markets, proposed changes that would see binary options elevated to the status of a financial asset that could be traded on its own in the major exchanges.
By early , the US Securities and Exchange Commission SEC accepted the recommendations of the OCC and made it legal for binary options to be offered on major exchanges as a stand-alone, tradable financial instrument.