Binary options really came of age in 2008, with the addition of them to the Chicago Board of Exchange (CBOE) and the North American Derivatives Exchange (NADEX).
Since then, their popularity has exploded among both the financial trading and gaming industries.
Once offered in these major financial exchanges, they became a part of the exchange market and brought government regulations and taxes.
In traditional trading, traders predict the precise value of stocks in the future, buying a contract for that amount.
The expiration date can be set several months or weeks in advance.
As the price increases or decreases, the owner of the future can buy more futures contracts or sell them.
With binary options, contracts expire much more quickly, and traders simply wait out the trade until the time of expiry instead of buying and selling up until the time of expiry.
Although it is less flexible for traders, it is also much simpler.
A new option for traders and operators with less regulation became available soon after.
Online binary options provide the possibility for traders to trade without receiving a contract, opening the market around the globe.
One word of caution: Traders need to research the market and make sure they are dealing with a reputable company.
Some more experienced traders see this market as a means for beginning traders to get experience trading in the traditional market.
Then again, many experienced traders are now getting involved in the binary options market! With its exponential increase in popularity we have witnessed the same principles of this trading applied to fixed-odds gaming on the weather, television shows, sports, and political events.
There are hundreds of online sites with fixed-odds gaming of different teams and events from all over the world.