• Facebook
  • Google
  • Twitter
  • Youtube
  • Rss
  • Home
  • Profit Strategies
    • Risk Management
      • Intro to Money Management
      • Trading Psychology
      • Can You Afford to Lose?
    • Trading Techniques
    • Trading Fundamental Events
  • Gold & Oil
    • Commodities
    • Currencies
    • Indices
    • Stocks
    • Daily Market Review
  • Trading Platforms
    • Types of platforms
      • Overview of Platforms
      • Digital Options Pro
      • One Touch Platform
      • The Option Builder
      • 60 Second Trading
      • Binary META
    • Wise Binary Trading
      • Easier to Deposit than Withdraw, Why?
      • Are Binary Brokers Regulated?
      • Technical Troubleshooting
    • Best Brokers
      • Choosing the Right Binary Options Broker
      • Platform Features your Broker should Offer
      • Most Secure Binary Brokers
  • Binary Options School
    • Intro to Binary Options
      • The Story Behind Binary Options
      • Why Binary Options?
      • What are Binary Options?
      • Forex & Binary Options: The Differences
      • Forex & Binary Options: The Similarities
      • Binary Options vs. Vanilla Options
      • Binary Options Dictionary
    • Start Trading
      • How to Trade Binary Options In 5 Steps
      • Learn How to Maximize Your Account
      • Demo Accounts - A Good Way To Start
      • Market Schedule
      • Should you Accept a Trading Bonus?
    • Fundamental Analysis
      • Fundamental Analysis: What & Why
      • General Economic Reports
      • Manufacturing Reports
      • Federal Open Market Committee (FOMC) Reports
      • Trade Reports
      • Employment Reports
      • Building & Housing
      • Eurozone Reports
    • Technical Analysis
      • Binary Options Technical Analysis
      • Technical Analysis: What and Why?
  • Open an Account
  • About Us
Home» Binary Options School » Intro to Binary Options » The Story Behind Binary Options

Quick Section Navigation

  • Intro to Binary Options
    • What are Binary Options?
    • Forex & Binary Options: The Similarities
    • Binary Options vs. Vanilla Options
    • Binary Options Dictionary
    • Why Binary Options?
    • The Story Behind Binary Options
    • Forex & Binary Options: The Differences
  • Start Trading
    • Market Schedule
    • Should you Accept a Trading Bonus?
    • Demo Accounts - A Good Way To Start
    • Learn How to Maximize Your Account
    • How to Trade Binary Options In 5 Steps
  • Fundamental Analysis
    • The Affects of Employment Reports on the Financial Markets
    • Trade Reports
    • General Economic Reports
    • Building & Housing
    • Eurozone Reports
    • Fundamental Analysis: What & Why
    • Manufacturing Reports
    • Federal Open Market Committee (FOMC) Reports
  • Technical Analysis
    • Binary Options Technical Analysis
    • Technical Analysis: What and Why?
  • Test Yourself

Archives

  • March 2013 (17)
  • February 2013 (17)
  • January 2013 (16)
  • December 2012 (16)
  • November 2012 (17)
  • October 2012 (22)
  • September 2012 (16)
  • August 2012 (22)
  • July 2012 (16)

The Story Behind Binary Options

Written by: Sophie May

In the last few years, binary option trading has become widespread and grown remarkably in popularity among investors. It is a common misconception that this recent boom marked the start of the industry: in reality, the origins of binary option trading date back much further.

Traded at an Exchange

Binary options have long been traded at exchanges. To this day it remains possible to trade these options at exchanges such as the Chicago Board Options Exchange (CBOE). The CBOE lists both call and put binary options. There are no price variables so the trader wins or loses a set amount. If the price of the underlying asset closes above the strike price, the buyer of a call option is in-the-money, and visa-versa. As with traditional options, binary option positions traded at an exchange may be bought or sold prior to expiration.

Online Trading Platforms

In 2008 binary options became accessible to retail investors via online trading platforms. This came about after an SEC (Securities and Exchange Commission) ruling in the US, meaning that binary options were no longer limited to being traded on an exchange. A number of online brokerages opened, finally making binary options trading mainstream and accessible.

The ruling by the SEC coincided with the global financial crisis and a recession that hit investors hard. People felt increased skepticism about traditional investments and desired higher security and more manageable risks. Indeed, Banc De Binary was founded in January 2009 by those coming from the traditional banking world, who experienced the banking crisis first hand and wanted to offer investors a more stable means of trading.

21st Century Economics

The digital age has revolutionized the financial markets. There are more assets and contract types than ever before. Large investment houses, with advanced computer programs backing up the work of their financial analysts, have a distinct advantage over the average investor and can capitalize on investment opportunities, leaving retail investors priced out and pushed out of the markets.

This economic climate has combined with increased market volatility to drive the growth of the binary options industry. Brokerages have succeeded in marketing their products to those who suffer most from the complexities associated with traditional investments, as well as to those who have never traded before but desire a simple route into the financial world. Binary options have therefore developed a reputation for known risks, simplicity, and a de-emphasis on volatility. These very qualities will undoubtedly guarantee the future of the industry and its continued development.

Profit Strategies

  • Risk Management
  • Trading Techniques
  • Trading Fundamental Events

Gold & Oil

  • Commodities
  • Currencies
  • Indices
  • Stocks
  • Daily Market Review

Trading Platforms

  • Types of Platforms
  • Wise Binary Trading
  • Best Brokers

Binary Options School

  • Intro to Binary Options
  • Start Trading
  • Fundamental Analysis
  • Technical Analysis
  • Test Yourself

Trading Binary Options is highly speculative and carries a high level of risk. It is possible to lose all your capital.
These products may not be suitable for everyone and you should ensure that you understand the risks involved. Seek independent advice if necessary.

Banc De Binary Limited is authorised and regulated by CySEC (Licence no. 188/13)

(c) 2012 Banc de Binary