TechFinancials, which has developed a binary options trading technology platform, has announced that it will hold an IPO on London's AIM market next week. According to the "Forex Magnates" website, this will be the first-ever offering of a binary options trading company on the AIM.
In its announcement, TechFinancials provided no details of the amount it intends raising (maybe including an offer to sale of shares) or at what company value.
Binary options are a high-risk investment with potential high-returns. The instrument is an option in which the payoff can have only two possible outcomes, either some fixed monetary amount of some asset determined ahead of time or nothing at all (in contrast to ordinary financial options that typically have a continuous spectrum of payoff). The two main types of binary options are the cash-or-nothing binary option and the asset-or-nothing binary option. The cash-or-nothing binary option pays some fixed amount of cash if the option expires in-the-money while the asset-or-nothing pays the value of the underlying security.
When buying a binary option the potential return it offers is certain and known before the purchase is made. Binary options can be bought on virtually any financial product and can be bought in both directions of trade either by buying a “Call”/“Up” option or a “Put”/“Down” option. Binary options are offered against a fixed expiry time.
A second Israeli binary option company that is likely to hold an IPO later this year is AnyOption. These IPOs together with online securities trading company Plus500 Ltd. (AIM: PLUS) demonstrate how Israel has become an online trading power.
TechFinancials claims that its market was worth $1 billion in 2014 and is growing by 50% annually.
TechFinancials provides the software it has developed to online brokers and the software is used by investors who want to earn from this instrument. According to "Forex Magnates," "The Israel-based company delivers its binary options solution to an estimated 40 to 50 brands, most notably 24Option.com. The company is also known to be operating a trading brand, OptionFair, using its CySEC license."
TechFinancials is registered in the Virgin Islands, licensed in Cyprus and has 107 employees in Cyprus and Israel. The company was founded in 2008 by Eyal Rosenblum and Asaf Lahav who serve as co-CEOs. Investors include Fidelity Venture Capital and former 888 Holding plc (LSE:888) CEO Gigi Levy.
Published by Globes [online], Israel business news - www.globes-online.com - on February 2, 2015
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