The concept of binary options trading originated in the United States in the early 1970s. The Chicago Board Options Exchange (CBOE) was the first exchange to offer options trading, including binary options.

The first type of binary option offered by the CBOE was called “cash-or-nothing” binary option. With this type of binary option, traders could either receive a fixed payout if their option expired in-the-money (i.e., their prediction was correct), or receive nothing if their option expired out-of-the-money (i.e., their prediction was incorrect).

For example, let’s say a trader bought a cash-or-nothing binary option on a particular stock with a payout of $100. If the stock price was above the strike price of the option at expiration, the trader would receive the fixed payout of $100. However, if the stock price was below the strike price, the trader would receive nothing.

Over time, different types of binary options were developed, including “asset-or-nothing” binary options, which paid out the value of the underlying asset instead of a fixed payout, and “one-touch” binary options, which only paid out if the price of the underlying asset touched a certain level.