Speculation Surrounding The Origins of Binary Options

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The origin of binary option trading is relatively short. It can be traced back to 2008, when it was first officially introduced as a tradable asset on the Chicago Board of Exchange (CBOE). Many people remember 2008 not for the start of this trading, but rather as a time when the financial markets around the globe were crashing. The sub-prime mortgage crisis caused Bear Stearns and Lehman Brothers to fall and the global markets and consequently, many investors’ pockets felt the impact.

That crisis affected everyone involved with the financial markets. The average everyday investor lost a lot of money across the globe. The whole financial market was teetering close to a total collapse. After some chaotic times, the market eventually regained its composure. Economics leaders were watching all this happen and they took the necessary steps to help the market get back together.

The average investors were also determined to get either a portion or all their money back. They pressured the economic leaders to figure out a plan. The added pressure seemed to work over a period of time. As a result leaders worked hard and finally came up with an investment method that catered to the average investors. That has been known as the origins of binary options.

However, that is not the whole story. Actually, binary options have been around a little earlier than when they were first publicly introduced to the CBOE in 2008. That was just when this form of trading became increasingly popular in the mainstream. You need to go back a little further to find out where they first originated.

Actually, you have to go all the way back to 1974. That year may ultimately be unofficially known as being the origin of binary options. Options trading on financial products first began on the newly formed CBOE. Back in those days, life wasn’t as simple. Today’s rigid framework of financial institutions and markets were not yet developed. Those days were pretty tough for investors.

Nevertheless, since 1974, binary options trading was always around but may not have used the exact name. Since this time it has turned into a more simple method of trading. Most times, they had been offered within a larger contract between companies and investors. During this time, there were no regulations or binary options brokers as we think of them today.

These subpar conditions continued for a while. Over time, binary options were considered a semi-official investment product, because they were typically available to banks, other financial institutions and some high net-worth investors in Over-the-counter (OTC) markets. Being considered this way, the origins of binary options actually very much mirrors the industry Forex trading prior to 1997 when it was also deregulated.

Even with the speculations about when the exact start of binary options was either in 1974, 2008 or somewhere in between; there is absolutely no speculation with the most recent increasingly popular history that is associated with this form of trading. It is the most preferred method for today’s investors. It may be due to the simplicity of these options or the potential for a large payout at the end of the expiration time. Whatever the case, binary options trading will continue to grow and prosper from the increasing number of investors who demand high returns from their investments.

Image courtesy of Stuart Miles /FreeDigitalPhotos.net

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