Japan’s number of active accounts in the binary options industry dipped despite an increase in YoY trading. Finance Magnates states that the data from The Financial Futures Association of Japan (FFAJ) reveals that binary options trading volume amounted to almost ¥38 billion ($432 million) – an increase of 7.45% from February 2017’s trading volume amount of ¥35.3 billion ($331 million).
The drop in activity was mostly due to veteran accounts exceeding the newly opened accounts that were opened for the month of February. There were approximately 363,140 existing accounts in February 2017, and that figure climbed by 6.5% last month to 386,920 – a spike of 23,780 new accounts over a period of one year. In February this year, the number of active accounts had fallen by 1,045 from a figure of 10,285, which marks a 9.20% YoY decline.
FFAJ’s figures reflect the high number of binary options’ trading volume that happens around the world. Nadex suggests that over 10,000 contracts are being listed daily in the binary options markets, which are accompanied by more than 500 strike prices to trade. Currently, there are 29 binary options markets that traders can participate in, including one in Japan.
The total trading volume for February’s binary options totaled ¥38 billion ($356 million), wherein ¥15.85 billion ($150 million) was accredited to the USD/JPY currency pair. Currently, the USD/JPY pairing is the most popular in the binary options industry based on the trading volume reported for December 2017 – February 2018.
In January 2018, the numbers for Japan’s binary options accounts climbed significantly. There were a total of 10,680 active accounts in January, which was up by 9.3% from December 2017’s reported accounts of only 9,770.
An increase in the number of active accounts was accompanied by a higher trading volume. In January, the trading volume went up to ¥46 billion ($432 million) — an increase of 35% from December 2017’s trading figures.
Drops in Japan’s monthly trading activity for binary options happen from time to time but the industry almost always recovers instantaneously. Last year, there was a drop in October’s trading volume but the binary options industry immediately bounced back based on December 2017’s total trading volume.
Currently, there’s no data that clearly links the drops of binary options trading to current investor sentiment. In the same article by Finance Magnates, it was mentioned that the underlying factor may be due to the rise in demand for cryptocurrencies like Bitcoin. However, the idea remains a theory because Forex trading volumes in October to December also dropped, and there’s no clear connection between Forex and the cryptocurrency industry due to both sectors having different markets.
Based on the data published by Reuters, the daily Forex volumes dropped by 7% in December 2017. The drop was caused by the low levels of volatility in currencies, and banks have been looking forward to the U.S. Fed’s interest rate hikes this year in order to bring back volatility. Binary options traders are also looking forward to an increased volatility because they capitalize on the price movements of assets in order to gain revenues.