The History of Binary Options

Binary Options first went main stream in 2008, but it has actually been around since 1997. At the time it was only available to banks, institutional companies and High Net Worth investors. Trading Binary was a lot more difficult than it is today, mainly because only Call options were available and trading could only be done through the Chicago Board of Exchange (CBOE). Complex contacts in a market with no liquidity required a lot of expertise to understand to be successful. Also, as it was at that time unregulated, it made over the counter markets very challenging.

2008 saw the greatest financial crash in history, and saw a rise in popularity of Binary as investors and traders were ‘stung’ by many of the large ‘Hedge Funds’ losing substantial amounts of money and closing their doors. The need for a low risk investment was needed and this is where Binary Options stepped in to fill the gap.

Wind the clocks forward to 2008 and Binary Options is probably the most recognised and favoured forms of trading for Home traders and retail traders. Trading Binary is so easy now it can be done all from a laptop at home and you can be setup with minutes. Because of how easy it can be understood and traded from home, it has been a target for scammers across the globe. Infact in 2017 it was reported that £87,410 was being scammed from traders every single day from Binary scams and it became the largest online scam in history.

Now Binary itself is not a scam if you seek professional advice and trade with a regulated broker but its the scammers that give it a bad name. Trading with an unregulated broker is the biggest part of this. You see in 2016/2017 you could set a white label Binary broker up for as little as £10’000 and this is where you play the middle man between the liquidity broker and the trader. The liquidity would provide the data feed to your platform for a monthly fee and then you, as the broker would offer Binary Options to your users. The broker would earn their money every time you lose so it was in their best interest for you to invest everything you have and convince you to trade more than you are comfortable doing so. Crazy offers like invest £1000 and we will match the investment was used and trade big and win big was all used to lure traders in. There was even cases of the brokers calling the traders and offering to trade their money for them to only discover they had lost everything. These types of brokers were unregulated and actually had no fixed   address. Most of the time they were started in Cyprus but would purchase London Postcodes and phone numbers to look more professional and this made it very hard to trace where the money was going.

Thankfully with the ban of all European brokers offering Binary options  to retail traders, the number of cases are slowly decreasing and the new scam has turned onto Crypto Currency.

Retail Trader = Normally an individual trader trading their personal account from home.

Institutional Trader = A trader who trades for a managed account, hedge fund or bank. Their account sizes and trade sizes are considerable larger than a retail traders.

Now with all that said is Binary Options still tradable and is it safe?

The simple answer is yes. For most retail traders now, there are a select few Brokers who are regulated and safe to trade Binary with and you can find them on our partnership page of the website. Binary itself is not a scam and with the right guidance and help you can profit from it. Taking advice from so called Account Managers and Signal providers offering 100% winning signals is a sure way for you to lose your money.

I have personally been a victim of this. In my early days of trading, I would get lured into joining unregulated brokers just so I could receive some apparently 100% winning signals. Now as a beginner you can accept its an easy thing to believe because we don’t know anything else. We see the expensive watches and flashy cars and we think we can profit from doing very little work but receiving signals. To cut the story short, I lost around £2000 in the first 6 months of my trading career and had never even looked at any charts. I was simply placing trades off my mobile every time I received a signal. It took nearly a year of doing this to realise the only way you will make real money is by taking the time to learn yourself.

Forget the easy get rich quick schemes and focus on the long term goals.

What do you want from trading? A quick buck or a successful career from it?

I know which one I want!

Now out of all the different forms of trading, Binary is by far the easiest to learn and trade but is it the easiest to make profit with??

Head over to the next lesson to find out