November Witnesses an Increase in Binary Options Trading Volumes in Japan

15th of December 2016

In comparison to October of 2016, and a similar financial reporting period the year before, Japan has seen a significant increase in binary options trading volumes this November. This information was revealed in a report released by the Financial Futures Association of Japan (FFAJ), the Japanese financial industry regulator.

In November, the industry experienced a 32 per cent increase in trading volumes in comparison to the preceding month of October. This is the second-greatest month-to-month increase in volumes the industry has witnessed this year, the other having come in June when trading volumes had increased by about 35% from the month of May.

And in comparison to November of 2015, the industry experienced a 13 per cent growth in trading volumes. For the month of November 2016, trading volumes exceeded ¥43 billion to reach 43.409 billion yen. This is more than 10 billion yen above October trading volume figures, during which period the FFAJ reported that the industry’s trading volumes were ¥32.821 billion.

In November of last year, binary options trading volumes amounted to ¥38.208 billion, which is still well over 5 billion yen below this year’s figure. However, the promising performance metric is still a few places below this year’s best performer.

In January, the industry set the reigning yearly trading volumes record of ¥62 billion. The months of February and July would also end up having trading volumes that were past the current ¥43 billion figure.

November also had an increase in the number of accounts held by traders among the 7 regulated Japanese binary options brokers. In October, there were 355,023 existing accounts, a figure that rose to 356,916 in November. The number of active accounts also rose from 10,980 to 11,929.

This improvement in account activity might have something to do with the surprisingly good trading figures the country’s binary options industry witnessed over the month of November. Still, there might be other factors in play considering that some months represented a decline in trading volumes despite an increase in both existing and active accounts.

For instance, in May, trading volumes fell to ¥30.408 billion from ¥36.489 in April despite an increase in both existing and active accounts. In fact, it is not very clear what may have caused this increase in trading volumes, but there are a number of competing theories.

One of the arguments justifying the increase in trade volumes is that the industry may have benefited from the general increase in financial trading activity within the country. Another argument explaining the increased trading volumes is that volatility has been unlocked in the Japanese markets, which has in turn resulted in a rise in trading volumes.

FFAJ has a history of publishing monthly information on the performance of its regulated brokers. Among the information included in the periodical reports include the trading volumes, account activity, and number of regulated brokers among other industry metrics.

In Japan, binary options is a lot more complex. For instance, traders can trade in ‘ladder’ options, which give the traders the option to choose predetermined price levels as they place their binary options bets.

Another peculiarity of the Japanese binary options market is that each broker is required to report its financial activity to the financial watchdog. European binary options brokers do not have to meet this stipulation. But then again, the regulators in this part of the world do not report monthly performance figures of the brokers under their oversight like the Japanese watchdog does.

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