History of Binary Options

Binary options gradually become more and more recognized. But their popularity growth isn’t as fast as it could be and the reason is many traders still don’t trust this type of contracts, have lack of information or simply don’t understand what this financial instrument is about. In Europe and USA binary options become increasingly widespread, but in Post-Soviet states their position is unstable. To understand what this type of financial instrument offers, let’s take a closer look at binary options market.

Inception and Development of Binary Options

Some traders think that binary options market was created by some kind of coalition of different fake companies which wanted to draw attention away from Forex and make it less popular by implementing unfair competition methods. But this information isn’t true. In reality this instrument was introduced in USA when Chicago Board Options Exchange offered contracts with S&P500 and VIX indexes as the underlying assets.

Right after this type of contract was made available for trading it didn’t get much attention and the market used to develop extremely slowly. There was the opportunity to trade, but people were reluctant to enter this market and therefore, no further development was recorded.

Regulation of this type of contracts by Cyprus Security and Exchange Commission helped open new perspectives. By regulating the market, the commission basically recognized binary option as a type of investment contract. Once this decision was made, Europe started to talk about binary options market again and more traders showed interest in entering it.

This was a carefully planned step taken by the commission and it had positive effect on the industry because since then companies willing to offer their services had to buy licenses. By selling these licenses Cyprus Commission earned good income.

The commission has created its own register which consisted of all legitimate companies operating on the market. CySEC was working on finding rogue companies and everyone could have its license cancelled. The number of brokers willing to be in the list of legitimate market participants and earn profit kept growing. This was a third stage of the development of binary options.

During the last several years binary options have gradually taken leading position in Europe and CIS countries. The market opportunities grow rapidly. Legality of binary options remains unclear in some countries, but it’s just the matter of time until this problem is resolved. The history of binary options development has just begun. Everyone who wants to work and earn money investing in this financial instrument can do it right now. But first they need to make sure is that their brokers have a CySEC license.

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