Edgar Filing: Optionable Inc

optionable_10k-123108.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

T ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008

¨ TRANSITION REPORT UNDER SECTION13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM __________ TO __________

COMMISSION FILE NUMBER: 000-51837

OPTIONABLE, INC.

(Name of registrant in its charter)

Delaware

(State or other jurisdiction of incorporation or organization)

52-2219407

(I.R.S. Employer Identification No.)

95 Croton Avenue, Suite 32, Ossining, NY 10562

(Address of principal executive offices) (Zip Code)

Issuer’s telephone Number: (914) 773-1100

Securities registered under Section 12(b) of the Exchange Act: None.

Securities registered under Section 12(g) of the Exchange Act: Common Stock: $.0001

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer o

Non-accelerated filer o Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

The aggregate market value of the common stock held by non-affiliates of the registrant, based upon the last sale price of the common stock reported on the OTC-Bulletin Board on December 31, 2008 was $325,875.

The number of shares of registrant’s common stock outstanding, as of February 10, 2009 was 52,423,403.

DOCUMENTS INCORPORATED BY REFERENCE

None.

TABLE OF CONTENTS

	Page
PART I

Item 1. Description of Business	1
Item 1A. Risk Factors	5
Item 2. Properties	11
Item 3. Legal Proceedings	11
Item 4. Submission of Matters to a Vote of Security Holders	13

PART II

Item 5. Market for Common Equity and Related Stockholder Matters	13
Item 6. Selected Financial Data	15
Item 7. Management’s Discussion and Analysis or Plan of Operation	15
Item 7A. Quantitative and Qualitative Disclosures about Market Risks	21
Item 8. Financial Statements and Supplementary Data	21
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure	21
Item 9A. Controls and Procedures	21
Item 9B. Other Information	23

PART III

Item 10. Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the Exchange Act	23
Item 11. Executive Compensation	26
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	28
Item 13. Certain Relationship and Related Transactions	30
Item 14. Principal Accountant Fees and Services	33
Item 15. Exhibits	34

SIGNATURES	38

PART I

ITEM 1. DESCRIPTION OF BUSINESS.

Optionable, Inc. (“the “Company”) was formed in Delaware in February 2000. Between April 2001 and July 2007, a substantial portion of our revenues were generated from providing energy derivative brokerage services to brokerage firms, financial institutions, energy traders, and hedge funds worldwide. A substantially portion of all energy derivatives we have brokered in the past were natural gas derivatives.

We launched our electronic trading system, OPEX, in 2006 and we enhanced its features and functionalities during 2007 and 2008. Users of OPEX can execute on the platform mostly energy-related derivative trades. A significant portion of the contracts executable on OPEX are those offered by NYMEX, a US exchange. However, we believe that OPEX features and functionalities can be ported to other derivatives as well, such as credit default swaps, interest-related derivatives, metals and other commodities. Additionally, we believe that OPEX, with appropriate enhancements, may be able to execute transactions offered by other exchanges as well. Effective November 4, 2008, the Company has suspended the development of OPEX. However, we intend to maintain OPEX and explore its possible sale or licensing.

A significant portion of our revenues through the third quarter of 2007 was derived from our business relationship with BMO Financial Group ("BMO"). We have not generated any revenues since the third quarter of 2007 as a result of the suspension of the business relationship with us by BMO together with the combined succession of events since then. In addition, the matters discussed in Item 3 of Part I of this Report "Legal Proceedings" have had a significant adverse impact on our business, including current and, likely, future results of operations and financial condition. Our management continues to seek out possible business transactions and new business relationships. Accordingly, we have refined our business strategy by seeking the following options:

(1)	to get advice from investment bankers as to whether we could or should sell our technology;

(2)	to license our technology to joint ventures with other brokerage or software development firms; and

(3)	to merge with another company, with a preference to combine with an operating brokerage firm.

We are also considering whether we should satisfy our existing obligations with current creditors and distribute our remaining assets to our stockholders.

We believe that if we merge with an existing brokerage firm, we may be able to maximize the value of our intangible assets. While we have been in discussions for strategic transactions with certain brokerage and software development firms from time to time, none of these discussions have materialized into an agreement with any of these parties. We cannot guarantee that we will be able to enter into a strategic transaction with a third party in the foreseeable future.

While we believe that it is likely that we will have to sell our technology, we are currently unable to determine whether we will continue to have any significant continuing involvement in the development or operations of OPEX or the brokerage operations of a brokerage firm with which we may combine our operations.

GOING CONCERN

The Company believes it has sufficient funds to meet its obligations, based on its internal projections, for at least the next twelve months. However, the Company cannot guarantee that it will do so. If there are unforeseen expenses or financial obligations which occur during that period such as those related to matters disclosed in Part I, Item 3- Legal Proceedings, the Company may not be able to meet such obligations. Additionally, if the Company acquires a brokerage or trading firm or a technology company which could be instrumental in the Company's long-term growth, this could hamper the Company's ability to continue as a going concern, both from a short-term or a long-term perspective, and the Company would have to resort to financing, through either debt or equity placements, for the funding of either such acquisitions or unforeseen expenses or financial obligations. There can be no assurance that any such financing would be available on acceptable terms, or at all, especially in light of the pending litigation against the Company and recent economic conditions.

INDUSTRY

The markets for energy commodities trading include trading in both physical commodities contracts and derivative instruments -- instruments that derive their value from an underlying energy commodity or index -- across a wide variety of commodities, including crude oil, natural gas, electricity or power, coal, chemicals, weather and emissions. Derivative instruments provide a means to manage exposure to price risk, asset portfolio allocation, speculation or arbitrage. Contracts for physical commodities allow counterparties to contract for the delivery of the underlying physical asset.

ENERGY DERIVATIVES

Energy derivatives are characterized by its underlying commodity (e.g., natural gas), the term of the contract, and the settlement, which can require physical delivery or financial settlement. The energy derivatives with the most liquidity are those with shorter settlement or expiration dates (less than three months). Derivatives with longer settlement or expiration dates are also larger in dollar volume and are not as liquid, requiring more extensive resources to find potential counterparties. Accordingly, these derivatives tend to generate higher brokerage transaction fees.

Energy-based commodities are actively traded.

Market Participants

Financial institutions, including bank brokerage houses and hedge funds as well as eligible individual traders use energy derivatives market to weigh their risk and rewards in: 1) a balanced portfolio asset allocation without investing in the physical asset, and 2) speculate on the price movement of the commodity prices or the related derivatives. Energy producers, distributors and large consumers will use energy gas derivatives market to manage their exposure to future price movements for certain quantity, time and delivery location, and sometimes, with an expectation that the derivatives would ultimately provide a financial gain.

Types of Energy Derivatives Markets

There are two types of energy derivative markets -- the futures market and the over-the-counter ("OTC") market.

Futures Market

Most of the transactions on the energy futures market are made through an exchange, such as New York Mercantile Exchange ("NYMEX") and Intercontinental Exchange ("ICE").

The trading of energy futures is conducted either on an electronic platform or on an open-outcry trading floor. Prices are established publicly either on a screen or on the floor by participants posting bids, or buying indications, and offers, or indications to sell. While the electronic platform provides more transparency to market participants, the open-outcry trading floor provides a better environment for exchange of ideas and solutions. However, it is anticipated that the volume of transactions conducted in an open-outcry trading floor will continue to decrease in the future.

Futures and options are two derivatives available to trade on a futures market. Futures consist of a contract to buy or sell a certain quantity of energy, for example, during a specified month and are settled through either physical delivery or cash settlement. Options consist of a right, but not an obligation, to buy or sell a futures contract at a certain price.

OTC Market

Over-the-counter, or OTC, is a term used to describe trading activity that does not take place on a regulated exchange.

Several derivatives are available for trade on the OTC market, such as forwards and swaps, differentials and spreads and options.

Forwards are negotiated agreements between counterparties to deliver a specified quantity of natural gas, on a specified date, and at a specified location.

Swaps are contracts between the holders of two different assets with differing risk and performance profiles in which the risk or performance characteristics are exchanged. Swaps may be settled against the future price of a single commodity or against an index of commodity prices.

Spreads are the simultaneous purchase and sale of forward contracts for different months, different commodities or different grades of the same commodity.

Basis options are contracts that allow counterparties to swap the physical or financial delivery of natural gas commodity between two different delivery points.

Options traded on the OTC market, unlike those traded on the futures market, are contracts that convey to the buyer the right, but not the obligation, to require the seller to make or take delivery of a stated quantity of energy at a specified price. Options may also be settled in cash, based on the difference between the market price of, for example, natural gas and the price of the commodity specified in the option.

Besides the types of derivatives traded on those markets, there are several inherent differences between them. For example, the futures market is primarily conducted through an open-outcry market, such as NYMEX, which imposes physical limitations on the number of participants who can trade at the same time. Accordingly, membership on such exchanges becomes a commodity of its own and may require significant resources. The types of derivatives traded on the OTC market are not standardized such as those used on the futures market. Therefore, when one counterparty wants to enter into OTC derivatives transactions, the use of a broker or a comprehensive electronic platform facilitates the search for another counterparty.

However, there is a significant similarity between these energy derivatives markets in that they lack transparency for the participants, unlike the equity market. Counterparties to a natural gas derivative transaction are unaware of all offers available on either market at any given time under current conditions, unless it is executed on an electronic platform with sufficient liquidity.

Our Solution

We understand that the participants in the energy derivatives market have various investment needs, some of which may be as simple as trading speculative futures, but most need a comprehensive electronic trading platform which allows them to execute more sophisticated transactions.

We believe that OPEX improves the liquidity and transparency of natural gas and other energy derivatives market by increasing number of participants in a market in which they receive real-time market data.

Central to OPEX is the trade-matching engine, which is designed to facilitate real-time trading of derivative products irrespective of a particular market. Based on our experience in trading and brokering OTC swaps and options, we devoted significant attention to the user experience and user-interface ergonomics. In designing the system, we were cognizant of the way traders currently execute their trades and how they could comfortably transition to an electronic trading platform. The outcome is a graphical user interface that is both simple and intuitive to use.

HOW WE OPERATE

We no longer have revenue-generating operations since the third quarter of 2007. Our management, and more specifically our Chief Executive Officer and President, is responsible for seeking alternatives which would allow us to maximize our resources, which are our cash and OPEX, while satisfying our financial obligations. While we are trying to monetize the value of OPEX in pursuing strategic arrangements with suitable takers pursuant to our revised strategy, there are no assurances that we will be able to do so at acceptable terms.

At December 31, 2008, we have one full-time employee.

We keep abreast of conditions in the energy trading market by receiving information using a combination of technology, such as analytics software as well as market data services, relevant business news from different wire services and traditional broadcast.

CLIENT CONCENTRATION

One of our clients, Bank of Montreal, accounted for 24% of our revenues during 2007. During May 2007, this client announced that it was suspending its relationship with the Company and has not used the Company's services in connection with any additional transactions since that time.

COMPETITION

The energy derivatives market has many competitors involved in the electronic trading of energy options. Capital investment for entry into the market is relatively low. While there were no transaction on OPEX since May 2007, it competes, with offerings from ICE and the Chicago Mercantile Exchange' CME.

As the emerging market for electronic energy derivatives develops, more competitors are likely to emerge.

We believe that the principal competitive factors in our market include:

access to a large number of users of an electronic trading system;

client service and support;

service functionality, quality and performance of the electronic trading system;

ease of use, reliability and security of electronic trading system;

establishing a significant sales force;

ability to introduce new products to the market in a timely manner; and

pricing.

We currently differentiate from the competition by offering energy derivatives on both the futures market and the OTC market on an electronic system. Our electronic system is designed to offer a more comprehensive approach to trading than the existing electronic platforms offer. However, our competitors have significantly more resources than we do and a larger number of users.

EMPLOYEES

We currently have one full-time employee. We also have a part-time consultant who serves as our Chief Financial Officer. We believe that our relationship with our employee and consultants is good considering the circumstances in which we operate.

PATENTS, TRADEMARKS AND LICENSES

We have four patents pending at this time, most importantly those related to a system and method for real-time trading over a computer network and a system and method for trading selectable market transactions over a network

We have registered a trademark for "Optionable" and use OPEX as a service mark. Although we have several patents pending which relate to our electronic trading system, we do not solely depend on those patents to protect our intellectual property. Furthermore, the benefit that would be afforded by those patents has not been relied upon in our business plan, although we do feel that the patents would benefit our position in the marketplace. We have taken various steps to protect our intellectual property including non-disclosure agreements, confidentiality agreements and other general precautions taken to keep the information confidential.

RESEARCH AND DEVELOPMENT

We incurred approximately $660,000 and $1.1 million in expenses on research and development during 2008 and 2007, respectively. Effective November 4, 2008, the Company suspended the development of OPEX, but the Company intends to maintain it.

GOVERNMENT REGULATION

We gave notice to the Commodity Futures Trading Commission ("CFTC") of our intention to operate the OPEX electronic trading platform as an Exempt Commercial Market ("ECM"). ECMs are subject to certain information access rules established by the CFTC. While the CFTC has filed a complaint against us on a separate matter- see Item 3 Legal Proceedings, it has not notified the Company that it revoked our license to operate OPEX as an ECM. In addition, there were no transactions on OPEX during 2008.

ITEM 1A. RISK FACTORS

This investment has a high degree of risk. Before you invest you should carefully consider the risks and uncertainties described below and the other information in this report. Each of the following risks may materially and adversely affect our business, results of operations and financial condition. These risks may cause the market price of our common stock to decline, which may cause you to lose all or a part of the money you paid to buy our common stock

WE MAY NOT BE ABLE TO CONTINUE TO OPERATE AS A GOING CONCERN

The Company believes it has sufficient funds to meet its obligations, based on its internal projections, for at least the next twelve months. However, the Company cannot guarantee that it will do so. If there are unforeseen expenses or financial obligations which occur during that period, such as those related to matters disclosed in Part I, Item 3- Legal Proceedings, the Company may not be able to meet such obligations. Additionally, if the Company acquires a brokerage or trading firm or a technology company which could be instrumental in the Company's long-term growth, this could hamper the Company's ability to continue as going concern, both from a short-term or a long-term perspective, and the Company would have to resort to financing, through either debt or equity placements, for the funding of either such acquisitions or unforeseen expenses or financial obligations. There can be no assurance that any such financing would be available on acceptable terms, or at all, especially in the light of the pending litigation against the Company and recent economic conditions.

AS A RESULT OF THE APPARENT LOSS OF OUR MOST SIGNIFICANT CUSTOMER, A DECLINE IN BUSINESS FROM OTHER BROKERAGE CUSTOMERS AND THE MUTUALLY AGREED DEPARTURES OF FLOOR BROKERAGE PERSONNEL, WE ARE ATTEMPTING TO REVISE OUR STRATEGY. THERE CAN BE NO ASSURANCE THAT THESE EFFORTS WILL BE SUCCESSFUL.

Several developments in 2007, including (i) the loss of our most significant customer, Bank of Montreal, (ii) a decline in business from other brokerage customers, and (iii) the mutually agreed departures of our floor brokerage personnel, among other things, have adversely affected our ability to operate as a brokerage services provider through traditional voice-brokerage and on the floor of the NYMEX Holdings, Inc ("NYMEX"). In response, we are attempting to revise our strategy to emphasize the marketing of OPEX to end-users through indirect channels, such as through third-party brokers and other exchanges, and the development and enhancement of OPEX for use by end-users in additional markets (i.e., other then solely the energy derivatives markets). Historically, we engaged primarily in voice-brokerage and had only recently introduced our OPEX platform. Although the initial results of OPEX were promising, it had not yet reached full market acceptance in the energy derivatives market. There is no assurance that we will be able to effectively market OPEX to end-users through indirect channels. There is also no assurance that we will be able to develop the enhancements to OPEX necessary to make it suitable for use by end-users in additional markets or, even if we do develop the necessary enhancements, that end-users in those additional markets will accept OPEX.

There is no assurance that we will be able to identify potential acquisitions, negotiate acquisitions on terms acceptable to us, or at all, or obtain the necessary financing for any potential acquisitions that we may identify. If we do make acquisitions or enter into joint ventures as part of our revised strategy, such transactions will involve significant risks and challenges, including risks that we may experience difficulty in the integration of the new businesses, technologies and employees with our own, that the new businesses may divert management's attention from other pressing matters and that we may not realize a satisfactory return on any investment we may make in them.

UNLESS AND UNTIL WE ARE ABLE TO IMPLEMENT OUR STRATEGY, WE HAVE NO REVENUES AND NO POTENTIAL SOURCES OF FUTURE REVENUE

We have recently suspended the development of our OPEX technology and have no operations and no revenue source. Our attempts to restore business and generate revenues have been hindered by litigation brought against the Company. Our initial discussions with potential business partners have not progressed beyond an indication of interest in our technology due to pending litigation against the Company. There can be no assurance that we can expeditiously resolve all pending litigations against the Company and after the resolution of the pending litigation that we will be able to generate interest in our technology that would materialize into an agreement upon terms that are satisfactory to our board of directors.

ALTHOUGH WE HAVE HAD NO REVENUES, WE CONTINUE TO INCUR EXPENSES

We have not generated revenues since the third quarter 2007. However, we continue to incur expenses, including salaries, auditing and legal expenses necessary to maintain our reporting status and legal fees in connection with certain legal proceedings. While our management estimates that we have enough funds for at least the next twelve months, there can be no assurance that such funds will be sufficient if we were to face any unanticipated expenses.

WE MAY LIQUIDATE AND DISTRIBUTE OUR ASSETS TO OUR SHAREHOLDERS.

We did not generate any revenues since the third quarter of 2007. Our management continues to seek alternatives which would allow us to maximize our resources, which are our cash and OPEX, while satisfying our financial obligations. While we are trying to monetize the value of OPEX in pursuing strategic arrangements with suitable takers pursuant to our revised strategy, there are no assurances that we will be able to do so at acceptable terms. If we are not able to maximize our resources, we may liquidate and distribute our assets to our shareholders.

THE US ATTORNEY’S OFFICE MAY SEEK TO SEIZE FUNDS WE HOLD AT ONE OR MORE FINANCIAL INSTITUTIONS

In November 2008, the Assistant United States Attorney sought to seize one of the Company’s bank accounts by a warrantless seizure. The bank account balance at December 31, 2008 amounts to approximately $530,000. In December 2008, the financial institution sent a notice asking that the funds held in this bank account be transferred to a different financial institution. The warrantless seizure lapsed in January 2009. The Company has not transferred the funds yet. While the warrantless seizure lapsed, it is possible that the Assistant United States Attorney may try to seize such funds by other means. It is possible that the Assistant United States Attorney may try to seize other bank accounts we hold. While the Company intends to vigorously defend this matter, there exists the possibility that the Company may have to forfeit or disgorge some or all of our cash.

WE ARE INVOLVED IN PENDING LEGAL PROCEEDING BROUGHT AGAINST US AND CERTAIN OF OUR FORMER AND CURRENT DIRECTORS AND OFFICERS. WE ARE UNABLE TO PREDICT THE OUTCOME OF THESE PROCEEDINGS AND CAN GIVE NO ASSURANCE THAT THE OUTCOME OF THESE PROCEEDING WILL NOT HAVE A MATERIAL ADVERSE EFFECT ON US OR THAT OTHER PROCEEDINGS WILL NOT BE INITIATED.

On November 18, 2008, a complaint was filed in the District Court for the Southern District of New York by the Commodity Futures Trading Commission against us, certain of our former employees, including our former Chief Executive Officer, Kevin Cassidy and our former President and a current Director, Edward O’Connor , David Lee, a former Bank of Montreal trader, and Robert Moore, a former executive managing director of BMO’s Commodity Derivatives Group alleging among other things, violations of, Section 4c(b) of the Commodity Exchange Act, as amended and Commission Regulations 33.10(a),(b) and (c).

We are unable to predict the outcome of this proceeding at this time and can give no assurance that the outcome of these proceedings will not have a material adverse effect on us or that there will not be other proceedings arising from these matters.

OUR MANAGEMENT TEAM HAS BEEN AND WILL BE REQUIRED TO DEVOTE A SIGNIFICANT AMOUNT OF TIME TO MATTERS RELATING TO LITIGATION AND RESPONDING TO GOVERNMENTAL INQUIRIES.

Our management team and employees have devoted a significant amount of time to matters relating to certain legal proceedings and to requests for documents and information received from the CFTC, the SEC, the DOJ and the District Attorney's Office. Defending these actions and responding to the government requests for documents and information has required, and will continue to require, significant time and attention from members of our current senior management team and our Board of Directors. If the amount of time that our senior management team is able to devote to developing and implementing our revised strategy is significantly reduced as a result of these matters, it may have a material adverse effect on our business.

OUR SUCCESS IN THE FUTURE WILL BE DEPENDENT UPON OUR ABILITY TO ATTRACT AND RETAIN SKILLED REPLACEMENTS.

Our performance and future operating results are substantially dependent on the continued service and performance of Thomas Burchill. Mr. Burchill was appointed as our Chief Executive Officer and President in January 2009. To the extent that the services of Mr. Burchill become unavailable, our business and prospects would be adversely affected. Should we be required to do so, we do not know whether we would be able to employ equally qualified persons to replace Mr. Burchill. Moreover, we do not currently maintain "key man" insurance on any of our executive officers or other key employees and do not intend to obtain this type of insurance in the near future. If we are successful in implementing and developing our revised strategy, we may require additional managerial, administrative and support personnel. Competition for highly qualified personnel is intense, and we can make no assurances that we can retain our key employees or that we will be able to attract or retain qualified personnel in the future. To the extent we have fewer financial resources available to us than our competitors we may not be able to attract and retain a sufficient number of qualified personnel. The loss of the services of any of our management or other key employees and our inability to attract and retain other necessary personnel could have a material adverse effect on our financial condition, operating results, and cash flows.

WE CANNOT BE CERTAIN THAT WE WILL BE ABLE TO PROTECT OUR INTELLECTUAL PROPERTY.

We have patent applications pending, which are intended to protect certain of our proprietary technology relating to OPEX. We have been cautious in seeking to obtain patent protection for our products, since patents often provide only narrow protection that may not prevent competitors from developing products that function in a manner similar to those covered by our patents. If we are unable to protect our intellectual property we may not be able to exploit its value and may be unable to sell or license our technology. The failure to consummate an agreement with a third party for our technology may result in the Company winding up its operations.

POTENTIAL LIABILITY FOR INFRINGEMENT CLAIMS MIGHT DETER CLIENTS FROM USING OUR OPEX SYSTEM.

We could be subject to intellectual property infringement claims by others. Potential clients may be deterred from using our OPEX system for fear of infringement claims. If, as a result, potential clients forego using our OPEX system, there may be no demand for our applications and we may not be able to realize the value we believe our technology has. Claims against us, and any resulting litigation, should it occur in regard to any of our services and applications, could subject us to significant liability for damages including treble damages for willful infringement. In addition, even if we prevail, litigation could be time-consuming and expensive to defend and could result in the diversion of our time and attention. Any claims from third parties may also result in limitations on our ability to use the intellectual property subject to these claims. Claims that we are infringing the intellectual property rights of third parties could have a negative effect on our business, revenues, financial condition and results of operations.

IF WE FAIL TO ENHANCE OUR OPEX SYSTEM BY INTRODUCING NEW FEATURES AND FUNCTIONALITIES IN A TIMELY MANNER TO MEET CHANGING CLIENT REQUIREMENTS AND EMERGING INDUSTRY TRENDS OR STANDARDS, OUR ABILITY TO GROW OUR BUSINESS WILL SUFFER.

The market for electronic trading systems is characterized by rapidly changing technologies and short product life cycles. These market characteristics are heightened by the emerging nature of the Internet and the continuing trend of companies from many industries to offer Internet-based applications and services. The widespread adoption of the Internet, networking, electronic option trading, or telecommunications technologies or other technological changes could require us to incur substantial expenditures to modify or adapt our operating practices or infrastructure. Our future success will depend in large part upon our ability to:

identify and respond to emerging technological trends in the market;

enhance our products by adding innovative features that differentiate services and applications from those of our competitors;

acquire and license leading technologies;

bring new services and applications to market and scale our business on a timely basis at competitive prices; and

respond effectively to new technological changes or new product announcements by others.

Our technology will not be competitive unless we introduce new features and functionalities to our OPEX system that meet evolving industry standards and client needs. In the future, we may not be able to address effectively the compatibility and interoperability issues that arise as a result of technological changes and evolving industry standards. The technical innovations required for us to remain competitive are inherently complex, require long development schedules and are dependent in some cases on sole source suppliers. We will be required to continue to invest in research and development in order to attempt to maintain and enhance our existing technologies and products, but we may not have the funds available to do so. Even if we have sufficient funds, these investments may not serve the needs of clients or be compatible with changing technological requirements or standards. Most development expenses must be incurred before the technical feasibility or commercial viability of new or enhanced services and applications can be ascertained. Revenue from future services and applications or enhancements to services and applications may not be sufficient to recover the associated development costs.

Effective November 4, 2008, we suspended the development of OPEX.

THE TECHNOLOGY UNDERLYING OUR OPEX SYSTEM IS COMPLEX AND MAY CONTAIN UNKNOWN DEFECTS THAT COULD HARM OUR REPUTATION, RESULT IN PRODUCT LIABILITY OR DECREASE MARKET ACCEPTANCE OF OUR SERVICES AND APPLICATIONS.

The technologies underlying financial services and applications are complex and include software that is internally developed. Software products using these technologies may contain errors or defects, particularly when first introduced or when new versions or enhancements are released. We may not discover software defects that affect our current or new services and applications or enhancements until after they are sold. Furthermore, because our services and applications are designed to work in conjunction with various platforms and applications, we are susceptible to errors or defects in third-party applications that can result in a lower quality product for our clients. Because our clients depend on us for digital media management, any interruptions could:

damage our reputation;

cause our clients to initiate product liability suits against us;

increase our product development resources;

cause us to lose revenues; and

delay market acceptance of our products.

WE FACE INTENSE AND INCREASING COMPETITION IN THE ELECTRONIC ENERGY DERIVATIVES MARKET. IF WE DO NOT COMPETE EFFECTIVELY OR IF WE EXPERIENCE REDUCED MARKET SHARE FROM INCREASED COMPETITION, OUR BUSINESS WILL BE HARMED.

There are several other well-financed companies who do or may compete with OPEX. Some of the features of OPEX compete with some of ICE's offerings and the Chicago Mercantile Exchange's CME.

Substantially all of our competitors have more capital, longer operating histories, greater brand recognition, larger client bases and significantly greater financial, technical and marketing resources than we do. These competitors may also engage in more extensive development of their technologies, adopt more aggressive pricing policies and establish more comprehensive marketing and advertising campaigns than we can. Our competitors may develop products and service offerings that we do not offer or that are more sophisticated or more cost effective than our own. For these and other reasons, our competitors' products and services may achieve greater acceptance in the marketplace than our own, limiting our ability to gain market share and client loyalty and to generate sufficient revenues to achieve a profitable level of operations. Our failure to adequately address any of the above factors could harm our business and operating results.

SOME STOCKHOLDERS, IF THEY ARE ABLE TO FORM A MAJORITY, MAY BE ABLE TO TAKE STOCKHOLDER ACTIONS WITHOUT GIVING OTHER STOCKHOLDERS PRIOR NOTICE AND WITHOUT GIVING SUCH OTHER STOCKHOLDERS A CHANCE TO VOTE ON THE MATTER AT A STOCKHOLDER MEETING. YOU MAY, THEREFORE, BE UNABLE TO TAKE PREEMPTIVE MEASURES THAT YOU BELIEVE ARE NECESSARY TO PROTECT YOUR INVESTMENT IN THE COMPANY.

Section 228 of the Delaware General Corporation Law and our Certificate of Incorporation permits our stockholders to take any action which is otherwise required to be taken, or is permitted to be taken, at an annual or special meeting of the stockholders, without prior notice and without a vote of all the stockholders. Instead of a vote, stockholder actions can be authorized by the written consents to such actions, signed by the holders of the number of shares which would have been required to be voted in favor of such action at a duly called stockholders meeting. We would not be required to give prior notice to all stockholders of actions taken pursuant to the written consents of the stockholders who collectively form a majority.

IF WE FAIL TO REMAIN CURRENT IN OUR REPORTING REQUIREMENTS, WE COULD BE REMOVED FROM THE OTC BULLETIN BOARD WHICH WOULD LIMIT THE ABILITY OF BROKER-DEALERS TO SELL OUR SECURITIES AND THE ABILITY OF STOCKHOLDERS TO SELL THEIR SECURITIES IN THE SECONDARY MARKET.

Companies trading on the Over-The-Counter Bulletin Board, such as we are , must be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and must be current in their reports under Section 13, in order to maintain price quotation privileges on the OTC Bulletin Board. If we fail to remain current on our reporting requirements, we could be removed from the OTC Bulletin Board. As a result, the market liquidity for our securities could be severely adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market. In addition, we may be unable to get re-listed on the OTC Bulletin Board, which may have an adverse material effect on our Company.

OUR COMMON STOCK IS SUBJECT TO THE "PENNY STOCK" RULES OF THE SEC AND THE TRADING MARKET IN OUR SECURITIES IS LIMITED, WHICH MAKES TRANSACTIONS IN OUR STOCK CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR STOCK.

The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a "penny stock," for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:

that a broker or dealer approve a person's account for transactions in penny stocks; and

the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

In order to approve a person's account for transactions in penny stocks, the broker or dealer must:

obtain financial information and investment experience objectives of the person; and

make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form:

sets forth the basis on which the broker or dealer made the suitability determination; and

that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

Generally, brokers may be less willing to execute transactions in securities subject to the "penny stock" rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

ITEM 2. DESCRIPTION OF PROPERTY

Our headquarters are located in Ossining, New York. The office consists of approximately 250 square feet. Our headquarters were previously located in Valhalla, New York. Our monthly rent amounts to $500 and our lease is renewable monthly

We believe our space is adequate for our current and foreseeable future operations.

ITEM 3. LEGAL PROCEEDINGS

Regulatory Matters

On November 18, 2008, a complaint was filed in the United States District Court for the Southern District of New York by the CFTC against the Company, former employees of the Company, including its former Chief Executive Officer and its former President and a current Director, Edward O’Connor, David Lee, a former Bank of Montreal (“BMO”) trader (“Lee”), and Robert Moore, a former executive managing director of BMO’s Commodity Derivatives Group.

The complaint alleges, among other things, that Lee, through the assistance of Moore, and employees of the Company, engaged in a scheme to mis-mark Lee’s natural gas options positions between at least May 2003 to May 2007, and mis-value other natural gas option positions from October 2006 until May 2007. The complaint further alleges that based upon the scheme, in April 2007, BMO announced anticipated losses of approximately C$350 million and C$450 million.

The CFTC alleges, among other things, violations of, Section 4c(b) of the Commodity Exchange Act, as amended (the “Act”) and Commission Regulations 33.10(a),(b) and (c). The CFTC seeks an order of permanent injunction restraining and enjoining, among others, the Company from directly or indirectly violating Section 6c(b) of the Act and Commission Regulations 33.10(a), (b) and (c). The CFTC further seeks an order directing, among others, the Company to pay civil monetary penalties in an amount not to exceed $120,000 or triple the monetary gain for each violation of the Act during the time period between October 23, 2000 and October 22, 2004 and $130,000 or triple the monetary gain for each violation of the Act on or after October 23, 2004.

The Company also understands that on November 18, 2008, a complaint was filed in the United States District Court for the Southern District of New York by the Securities and Exchange Commission (“SEC”) against Lee, Scott Connor, the Company’s former President and a Director, Edward O’Connor and its former Chief Executive Officer. The Company was not named in the SEC complaint. Like the action brought by the CFTC, the complaint is based upon allegations that the defendants engaged in a scheme to overvalue Lee’s commodity derivates trading portfolio at BMO.

The SEC alleges causes of action against the Company’s former President and a Director, Edward O’Connor, for violations of Sections 10(b), 13(a), 13(b)(2), 13(b)(5), Rules 13b2-2 and 13a-14 of the Securities and Exchange Act of 1934 (the “Exchange Act”), and Section 17(a) the Securities Act of 1933 (the “Securities Act”). The complaint seeks a permanent injunction against, among others, Mr. O’Connor and an order to pay civil penalties and disgorgement. The complaint also seeks an order prohibiting, among others, Mr. O’Connor from acting as an officer or director of a public company.

Mark Nordlicht vs Optionable, Inc.

On November 19, 2008 a complaint was filed by Mark Nordlict in the Delaware Court of Chancery to require the Company to conduct its annual meeting. On December 30, 2008, the Court ordered that the Company hold an annual meeting on or before March 31, 2009.

Shareholder Class Action Lawsuit

The class action sought unspecified damages arising from alleged violations of the federal securities laws, including the Securities Exchange Act of 1934, 15 U.S.C. ss. 78a et seq., (the "Exchange Act"), and Rule 10b-5 under the Exchange Act, 17 C.F.R. ss. 240.10b -5.The complaint alleged, among other things, that during the class period of January 22, 2007 to May 14, 2007, defendants failed to disclose certain information in public filings and statements, made materially false and misleading statements and misrepresentations in public filings and statements, sold artificially inflated stock and engaged in improper deals, had an improper relationship with and “schemed” with its customer Bank of Montreal ("BMO"), and understated the Company's reliance on its relationship with BMO. The Complaint alleged that while the Company's stock was trading at artificially inflated prices, certain defendants sold shares of common stock of the Company.

On September 15, 2008, Judge Kaplan granted the defendants’ motions to dismiss the complaint and denied the plaintiffs’ request for leave to amend, without prejudice to a motion for leave to amend, supported by a proposed amended complaint. Plaintiffs’ subsequently filed a motion for a partial lifting of the PSLRA discovery stay, which Defendants opposed. On October 20, 2008, the Court denied Plaintiff’s motion in all respects, and a final Judgment of dismissal was entered on October 23, 2008.

On January 13, 2009, the plaintiff filed a motion pursuant to Rule 60(b) for relief from the October 23, 2008 Final Judgment and seeking to file an amended complaint

The actual costs that will be incurred in connection with these actions cannot be quantified at this time and will depend upon many unknown factors.

While the Company intends to vigorously defend these matters, there exists the possibility of adverse outcomes that the Company cannot determine. These matters are subject to inherent uncertainties and management's view of these matters may change in the future.

Other Matters

Since May 2007, the Company has received requests for documents and information from the CFTC, the SEC and the DOJ and the District Attorney's Office. Since that time, the Company has complied, and continues to comply, with these requests for documents and information.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report.

The Company has scheduled its annual meeting of shareholders for March 31, 2009 at 10:00am at the Company’s offices at 95 Croton Avenue, Suite 32, Ossining, New York.

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

Our common stock is quoted on the Over-the-Counter Bulletin Board operated by the National Association of Securities Dealers, Inc. Our shares are listed under the symbol "OPBL."

The following table sets forth, for the fiscal quarters indicated, the high and low closing prices per share of our common stock as reported on the Over-the-Counter Bulletin Board. The quotations reflect inter dealer prices, without retail mark-up, mark-down or commissions and may not represent actual transactions.

	Fiscal 2008		Fiscal 2007		Fiscal 2006
Quarter Ended	High	Low	High (2)	Low (2)	High (2)	Low (2)
March 31	$0.10	$0.046	$6.15	$5.85	$1.50	$0.90
June 30	$0.07	$0.041	$0.45	$0.40	$0.90	$0.50
September 30	$0.07	$0.028	$0.16	$0.13	$0.75	$0.50
December 31	$0 .07	$0.011	$0.09	$0.06	$2.84	$0.50

At February 10, 2009, the closing price for our common stock was $0.018

At February 10, 2009, there were 52,428,203 shares of our common stock issued and 52,423,403 shares of our common stock outstanding. There are approximately 17 stockholders of record at February 10, 2009.

The transfer agent of our common stock is Continental Stock Transfer & Trust Company, whose address is 17 Battery Place, New York, NY 10004. The phone number of the transfer agent is (212) 509-4000.

DIVIDENDS

We have not declared any dividends to date. We have no present intention of paying any cash dividends on our common stock in the foreseeable future. The payment by us of dividends, if any, in the future, rests within the discretion of our Board of Directors and will depend, among other things, upon our earnings, our capital requirements and our financial condition, as well as other relevant factors. There are no restrictions in our articles of incorporation or bylaws that restrict us from declaring dividends

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

EQUITY COMPENSATION PLAN INFORMATION

The following table shows information with respect to each equity compensation plan under which our common stock is authorized for issuance at December 31, 2008:

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)
	(a)	(b)	(c)
Equity compensation plans approved by security holders	983,000	$0.42	6,344,000

Equity compensation plans not approved by security holders	-0-	N/A	-0-

Total	983,000	$0.42	6,344,000

2004 STOCK OPTION PLAN

We adopted our 2004 Stock Option Plan in November 2004. The plan provides for the grant of options intended to qualify as "incentive stock options" and options that are not intended to so qualify or "nonstatutory stock options." The total number of shares of common stock reserved for issuance under the plan is 7,500,000, subject to adjustment in the event of a stock split, stock dividend, recapitalization or similar capital change.

The plan is presently administered by our board of directors, which selects the eligible persons to whom options shall be granted, determines the number of common shares subject to each option, the exercise price therefor and the periods during which options are exercisable, interprets the provisions of the plan and, subject to certain limitations, may amend the plan. Each option granted under the plan is evidenced by a written agreement between us and the optionee.

Options may be granted to our employees (including officers) and directors and certain of our consultants and advisors.

The exercise price for incentive stock options granted under the plan may not be less than the fair market value of the common stock on the date the option is granted, except for options granted to 10% stockholders which must have an exercise price of not less than 110% of the fair market value of the common stock on the date the option is granted. The exercise price for nonstatutory stock options is determined by the board of directors. Incentive stock options granted under the plan have a maximum term of ten years, except for 10% stockholders who are subject to a maximum term of five years. The term of nonstatutory stock options is determined by the board of directors. Options granted under the plan are not transferable, except by will and the laws of descent and distribution.

RECENT SALES OF UNREGISTERED SECURITIES

We have not sold any equity securities during the fiscal year ended December 31, 2008 that were not registered under the Securities Act of 1933, as amended (the "Securities Act").

ITEM 6. SELECTED FINANCIAL DATA

N/A

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

The following discussion should be read in conjunction with the consolidated financial statements and the related notes that appear in this annual report.

RESULTS OF OPERATIONS - YEAR ENDED DECEMBER 31, 2008 COMPARED TO YEAR ENDED DECEMBER 31, 2007

Results of Operations

							Increase/			Increase/
	For the year ended						(Decrease)			(Decrease)
	December 31,						in $ 2008			in % 2008
	2008			2007			vs 2007			vs 2007

Brokerage fees	$	-		$	8,786,850		$	(8,786,850	)		-100.0	%
Brokerage fees-related parties		-		$	1,148,885			(1,148,885	)		-100.0	%
Incentives		-		$	3,285,058			(3,285,058	)		-100.0	%
Net revenues		-			13,220,793			(13,220,793	)		-100.0	%

Cost of revenues		-			7,798,438			(7,798,438	)		-100.0	%
Cost of revenues-related parties		-			30,013			(30,013	)		-100.0	%
		-			7,828,451			(7,828,451	)		-100.0	%

Gross profit		-			5,392,342			(5,392,342	)		-100.0	%

Operating expenses:
Selling, general and administrative		2,111,379			8,624,175			(6,512,796	)		-75.5	%
Impairment-considerable receivable from stockholder		-			145,771,878			(145,771,878	)	NM
Impairment-intangible asset		-			1,085,610			(1,085,610	)	NM
Research and development		659,211			1,094,188			(434,977	)		-39.8	%
Total operating expenses		2,770,590			156,575,851			(153,805,261	)	NM

Operating income		(2,770,590	)		(151,183,509	)		148,412,919		NM

Other income (expense):
Interest income		255,118			388,757			(133,639	)		-34.4	%
Other expense		-			(15,250	)		15,250		NM
Interest expense-related parties		(383,894	)		(340,707	)		43,187			12.7	%
		(128,776	)		32,800			161,576		NM

Net income before income tax		(2,899,366	)		(151,150,709	)		148,251,343		NM

Income tax benefit		468,566			415,548			53,018			12.8	%

Net income	$	(2,430,800	)	$	(150,735,161	)	$	148,304,361		NM


NM: Not meaningful

Revenues

Revenues during 2007 consisted primarily of fees earned from natural gas derivatives transactions and related incentive arrangements.

The decrease in brokerage fees during 2008 when compared to 2007 is primarily due to a decrease in the brokerage fees resulting from decreased volume of transactions of natural gas derivatives traded on the OTC market on behalf of existing clients during the current year periods. We have not generated any revenues since the third quarter of 2007.

The decrease in brokerage fees-related party during 2008 when compared to 2007 is primarily due to the fact that our agreement with Capital Energy Services, Inc., a related party, was effective during one month (i.e. January 2007). This agreement was terminated January 31, 2007.

The decrease in incentives earned during 2008 when compared to 2007 pursuant to an agreement with a US exchange, NYMEX Holdings, Inc., a stockholder (the “Investor”), was due to a higher volume of cleared OTC transactions handled by us on such exchange during 2007. We have not generated any incentive revenues since the second quarter of 2007.

As a result of the factors discussed above, we do not anticipate that we will generate revenues that we traditionally generated from OPEX, voice-brokerage and our floor operations for the remainder of 2009. We currently have no revenue source and expect to generate revenues only if we are able to implement our revised strategy.

Cost of revenues

During 2007, cost of revenues consists primarily of compensation of personnel directly associated with handling the natural gas derivative transactions on behalf of our clients as well as expenses associated with our floor brokerage operations. The decrease in cost of revenues in 2008 when compared to 2007 is primarily attributable to the termination of employment of substantially all our brokers during 2007, which reduced our compensation expenses (including salary, commissions, and share-based payment) associated with the employment of such brokers.

We do not expect that our cost of revenues for the remainder of 2009 will increase, unless we implement our revised strategy which could change our business model.

Selling, general, and administrative expenses

Selling, general, and administrative expenses consists primarily of legal fees, incurred in connection with the Company’s attention to certain allegations made recently and to our responses to and compliance with requests for documents and information received from the United States Commodity Futures Trading Commission (the “CFTC”), the United States Securities and Exchange Commission (the “SEC”), the United States Department of Justice (the “DOJ”) and a grand jury subpoena received from the New York County District Attorney’s office (the “District Attorney’s Office”), or to handle certain matters which occur during the course of our operations, and compensation of personnel supporting our operations. It also includes the amortization of the consideration receivable from the Investor and allowance for bad debt. The decrease in selling, general, and administrative expenses during 2008 when compared to 2007 is primarily due to the following:

one-time amortization of the Consideration receivable from the Investor of approximately $3.3 million which was recorded during the second quarter of 2007;

decreased legal fees of approximately $1.4 million. The decrease in legal fees is primarily due to higher legal fees incurred during 2007 in connection with our attention to certain allegations, our responses to, and compliance with the governmental requests described above, and in connection with the NYMEX transaction, further decreased by the recording of insurance proceeds authorized by our insurance carrier during 2008 which approximated $639,000. The insurance proceeds consist of the reimbursement of certain legal fees we incurred in connection with legal proceedings disclosed in Item 3 of Part I of this Report. We did not have as many governmental requests during 2008 and we did not received insurance proceeds from our insurance carrier during 2007;

one-time provision in June 2007 of approximately $640,000 in connection with our estimated incentives receivable from the Investor ;

decreased compensation to our directors during 2008 when compared to 2007. This decrease is primarily due to a decreased rate paid to our directors during 2008;

decreased investor relation fees in connection with decreased efforts to position our company before the investors community;

decreased marketing expenses incurred in connection with the decreased marketing efforts to position our company before the traders community;

As a result of the matters discussed above and in Item 3 of Part I1 of this Report, we believe that our legal fees for 2009 will continue to constitute a large share of our selling, general, and administrative expenses. We believe that our legal fees may increase in 2009 when compared to 2008.

Research and development

Research and development expenses consist primarily of compensation of personnel and consultants associated with the development and testing of our automated electronic trading system. The decrease in research and development expenses during 2008 when compared to the prior year period is primarily due to the following:

decreased number of software engineers used in the development of OPEX during 2008 offset by increased compensation rate for existing software engineers and quality and assurance personnel working on electronic platform, OPEX.

We expect that our research and development expenses will decrease during 2009. Effective November 4, 2008, the Company suspended the development of OPEX, but the Company intends to maintain it. The Company is unable to determine if and when it will resume the enhancement of features and functionalities of OPEX.

Impairment- Consideration receivable from Investor and Impairment- Intangible Asset

The impairment- consideration receivable from the Investor and impairment- intangible asset consists of one-time losses attributable to the lack of perceived likely benefits from 1) the consideration the Investor had agreed to provide to the Company pursuant to the Stock and Warrant Purchase Agreement and 2) the constructive rescission of the HQ Trading acquisition. The Stock and Warrant Purchase Agreement and the HQ Trading acquisition both took place during 2007 and no similar expenses occurred 2008.

Interest income

Interest income consists primarily of interest earned on interest-bearing cash and cash equivalents. The decrease in interest income during 2008 when compared to 2007 is primarily due to a decrease in interest rate we earned on our cash and cash equivalents’ interest bearing balances.

Interest expense to related parties

Interest expense to related parties consists of interest charges associated with amounts due to related parties, Mark Nordlicht, our former Chairman, and Edward O’Connor, a Director. The increase in interest expense to related parties during 2008 is primarily due to the increase in basis on which the interest is imputed, using the effective interest method.

Income tax

Income tax benefit consists of federal and state current and deferred income tax or benefit based on our net income. The increase in income tax benefit during the 2008 when compared to 2007 is primarily due to larger taxable losses we incurred during 2008 compared to 2007.

LIQUIDITY AND CAPITAL RESOURCES

Our cash balance as of December 31, 2008 amounts to approximately $9.0 million.

During 2008, we used cash from operating activities of approximately $945,000, primarily resulting from:

net loss of approximately $1.9 million, adjusted for the amortization of debt discount and depreciation of approximately $384,000;

a decrease in prepaid income taxes assets resulting from the reimbursement during 2008 of the 2007 federal and state estimated tax payments offset by the current year tax benefits resulting from operating losses; and

an increase in prepaid expenses of approximately $863,000 which primarily consists of the payment of additional retainers requested by law firms representing the Company, one of our directors, and our former chief executive officer in connection with certain legal matters disclosed in Item 3 of Part I of this report.

An increase of approximately $98,000 of the due to stockholder, which consists of legal fees incurred and paid by Mark Nordlicht, a stockholder, in his defense in connection with certain legal matters disclosed in Item 3 of Part I of this report, to whom the Company provides indemnification pursuant to its by-laws.

During 2007, we generated cash from operating activities of approximately $2.4 million, primarily resulting from:

net loss of approximately $150.7 million, adjusted for the impairment of the consideration receivable from the Investor, the amortization of the consideration receivable from the Investor, and the fair value of warrants, options and shares issued during the period aggregating approximately $145.8 million, $3.3 million, and $4.2 million, respectively; and

a decrease in accounts receivable and accounts receivable-related party of approximately $2.3 million, a decrease in incentive receivables from Investor of approximately $667,000 and a decrease in accrued compensation of $1.9 million due to a decline in revenues and associated expenses during the second half of the second quarter of 2007;

an increase in prepaid tax assets of $2.3 million resulting from the payment of estimated income taxes offset by a reduction of the anticipated income tax.

During 2007, we used our cash generated from operating activities to acquire the customer relationship of HQ Trading, a crude oil broker, for $400,000, acquired trading rights on the NYMEX floor for $1.2 million, and incurred capital expenditures aggregating approximately $241,000. We also disposed of a trading right for $1,165,000.

During 2007, we generated gross proceeds from the exercise of certain warrants and options aggregating approximately $220,000.

On May 30, 2006, our Board of Directors authorized us to repurchase such number of shares of our common stock that have an aggregate purchase price not in excess of $200,000 at the rate of up to $50,000 worth of common stock each quarter. The Company repurchased 4,800 shares at a cost aggregating $2,506 since the commencement of the share repurchase program. We did not repurchase any shares during 2008.

The Company has an outstanding promissory note (the “Note”) issued to Mark Nordlicht, our co-founder and Chairman until May 2007. The balance on the Note is approximately $5 million, is non-interest bearing and is due in 2014. We have voluntary prepayment rights and a requirement to prepay the outstanding balance on the Note with a portion of the proceeds of any equity or debt financing exceeding $1 million. To date, the Note is neither due, in default nor subject to any prepayment obligation of the Company. Edward O’Connor, our co-founder and former President, has a substantially similar promissory note with an outstanding principal balance of approximately $500,000. On January 28, 2009, our Board of Directors established a special committee of three directors to review and respond to Mark Nordlicht’s repeated requests to renegotiate the Note. While the Note is not currently payable or in default, the Company believes that it may be able to obtain a favorable resolution to a number of continuing disputes with Mr. Nordlicht regarding the satisfaction of the Note at a discount, the management and the future direction of the Company. The special committee has commenced negotiations with Mr. Nordlicht but there can be no assurance that a definitive agreement will be achieved. Members of the special committee are Thomas Burchill, Dov Rauchwerger and Andrew Samaan.

GOING CONCERN

The Company believes it has sufficient funds to meet its obligations, based on its internal projections, for at least the next twelve months. However, the Company cannot guarantee that it will do so. If there are unforeseen expenses or financial obligations which occur during that period, such as those related to matters disclosed in Part I, Item 3- Legal Proceedings, the Company may not be able to meet such obligations. Additionally, if the Company acquires a brokerage or trading firm or a technology company which could be instrumental in the Company's long-term growth, this could hamper the Company's ability to continue as a going concern, both from a short-term or a long-term perspective, and the Company would have to resort to financing, through either debt or equity placements, for the funding of either such acquisitions or unforeseen expenses or financial obligations. There can be no assurance that any such financing would be available on acceptable terms, or at all, especially in light of the pending litigation against the Company and recent economic conditions.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

A summary of significant accounting policies is included in Note 2 of the audited financial statements included in this Annual Report. Management believes that the application of these policies on a consistent basis enables us to provide useful and reliable financial information about our operating results and financial condition. Our financial statements and accompanying notes are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application of accounting policies. Critical accounting policies for us include the following:.

Revenue recognition

During 2007, revenue is recognized when earned. Our revenue recognition policies are in compliance with the SEC's Staff Accounting Bulletin ("SAB") No. 104 "Revenue Recognition". The application of SAB No. 104 requires us to apply our judgment, including whether our clients receive services over a period of time.

We generally invoiced our clients monthly, for all transactions which have been executed during such month. Revenues are recognized on the day of trade-trade date basis. Our revenues derive from a certain predetermined fixed fee of the transactions we execute on behalf of our clients. The fee is based on the volume of financial instruments traded. We base our fees on oral and written contracts and confirm the fees in writing upon the execution of each transaction.

During 2007, we also receive incentives from the New York Mercantile Exchange for the volume of OTC transactions we submit to their clearing platforms on behalf of our clients. The incentives are based on a percentage of the total revenues received by the exchange attributable to our volume of transactions submitted to the respective exchanges. We also apply our judgment when making estimates monthly of such incentives based on the volumes of transactions submitted to the respective exchanges and the exchanges' published revenues by type of transaction.

We, pursuant to SAB 104, realized the incentive revenues realized or realizable when all of the following criteria are met:

1) Persuasive evidence of an arrangement exists. We have a written separate agreement with an exchange which has publicly published the initial terms of its incentive program in 2003 which it modified in 2005 and which is offered to all intermediaries in the select transactions;

2) Delivery has occurred or services have been rendered. Under arrangements with the exchange, the incentives are earned on the day we submit transactions to the respective exchanges based on the revenues generated from such transactions and are no longer subject to minimum volume of transactions to the exchange. We account for all transactions submitted to each exchange on a daily basis. Accordingly, we are able to determine when the incentives are earned based on the date we submit transactions to the exchange. We have no other obligations to the exchange to earn the incentives;

3) "Seller's" price to the buyer is fixed or determinable. Based on the incentive program terms of each exchange, their published prices for the type of transactions we submit to them, and our transactions records, we are able to determine an estimate for the revenues each exchange earns in connection with the transactions it submits, and accordingly, the amount, if any of the incentives we earn in connection with such transactions; and

4) Collectability is reasonably assured. The exchange has paid us timely on incentives earned from 2004 through May 2007. The Company intends to enforce the payment of any incentives receivable.

Accounts and incentive receivable and related allowance for doubtful accounts.

Accounts receivable and incentive receivable are reported at net realizable value. We have established an allowance for doubtful accounts based upon factors pertaining to the credit risk of specific customers, historical trends, and other information. Delinquent accounts are written-off when it is determined that the amounts are uncollectible.

Share-based payment

We account for share-based payments in accordance with SFAS No. 123(R), Share-Based Payment. Under the fair value recognition provisions of this statement, share-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense over the vesting period. Determining the fair value of share-based awards at the grant date requires judgment, including estimating expected volatility. In addition, judgment is also required in estimating the amount of share-based awards that are expected to be forfeited. If actual results differ significantly from these estimates, stock-based compensation expense and our results of operations could be materially impacted.

Impairment of intangible assets

SFAS No. 142, Goodwill and Other Intangible Assets, requires that goodwill be tested for impairment on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of an intangible asset below its carrying value. These events or circumstances could include a significant change in the relationship with the contracting party, business climate, legal factors, operating performance indicators, or competition. Application of the intangible asset impairment test requires judgment, including the determination of the fair value of each intangible asset. The fair value of each intangible asset is estimated based on the consideration given by us to acquire the intangible asset(s). This requires significant judgment including the estimation of expected volatility if the Company issued common share equivalent as consideration. Changes in our estimates of undiscounted cash flows related to each intangible asset could materially affect the determination of the impairment for each intangible asset.

Contingencies

The outcomes of legal proceedings and claims brought against us are subject to significant uncertainty. SFAS No. 5, Accounting for Contingencies, requires that an estimated loss from a loss contingency such as a legal proceeding or claim should be accrued by a charge to income if it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. Disclosure of a contingency is required if there is at least a reasonable possibility that a loss has been incurred. In determining whether a loss should be accrued we evaluate, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. Changes in these factors could materially impact our financial position or our results of operations.

RECENT PRONOUNCEMENTS

The FASB issued FASB Statement No. 141 (revised 2007), Business Combinations, Statement 141(R ) requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed; and requires the acquirer to disclose to investors and other users all of the information they need to evaluate and understand the nature and financial effect of the business combination. FASB No.141 R is effective for fiscal years beginning after December 15, 2008. The Company does not believe that FAS No. 141 R will have any impact on its financial statements.

The FASB issued FASB Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements. Statement No.160 requires all entities to report noncontrolling (minority) interests in subsidiaries in the same way—as equity in the consolidated financial statements. Moreover, Statement 160 eliminates the diversity that currently exists in accounting for transactions between an entity and noncontrolling interests by requiring they be treated as equity transactions. FASB No.160 is effective for fiscal years beginning after December 15, 2008. The Company does not believe that FAS No. 160 will have any impact on its financial statements.

In March 2008, the FASB issued FASB No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133, which requires additional disclosures about the objectives of the derivative instruments and hedging activities, the method of accounting for such instruments under SFAS No. 133 and its related interpretations, and a tabular disclosure of the effects of such instruments and related hedged items on our financial position, financial performance, and cash flows. SFAS No. 161 is effective for the Company beginning January 1, 2009. Management believes that, for the foreseeable future, this Statement will have no impact on the financial statements of the Company once adopted.

In May 2008, FASB issued FASB Statement No. 162, The Hierarchy of Generally Accepted Accounting Principles.The new standard is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements that are presented in conformity with U.S. generally accepted accounting principles (GAAP) for non-governmental entities. We are currently evaluating the effects, if any, that SFAS No. 162 may have on our financial reporting.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

N/A

ITEM 8. FINANCIAL STATEMENTS.

All financial information required by this Item is attached hereto at the end of this report beginning on page F-1 and is hereby incorporated by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None

ITEM 9A(T). CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

As of December 31, 2008, our management our President and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15(b) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Based upon that evaluation, our President and our Chief Financial Officer concluded that, as of December 31, 2008, our disclosure controls and procedures were effective in ensuring that material information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, including ensuring that such material information is accumulated and communicated to our President and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

During the quarter ended December 31, 2008, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management's Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Exchange Act Rule 13a - 15(f). Our internal control system was designed to provide reasonable assurance to our management and the Board of Directors regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2008. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control - Integrated Framework - Guidance for Smaller Public Companies (the COSO criteria). Based on our assessment we believe that, as of December 31, 2008, our internal control over financial reporting is effective based on those criteria.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Our management's report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management's report in this annual report.

ITEM 9B. OTHER INFORMATION.

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

The following table sets forth information about our executive officers, key employees and directors as of February 10, 2009.

Name	Age	Position	Date of Election Or Appointment as a Director
Thomas Burchill	67	Chief Executive Officer, President, and Director	November 2007
Marc-Andre Boisseau	44	Chief Financial Officer	n/a
Edward O’Connor	55	Director	March 2001
Dov Rauchwerger	31	Director	November 2007
Andrew Samaan	41	Director	January 2009

Thomas F. Burchill has served as one of directors since November 2007. Mr. Burchill worked at Hearst, ABC and Viacom, serving, beginning in 1984, as the first President and Chief Executive Officer of Lifetime Television, owned by the three companies. Between 1993 and 2001, Mr. Burchill, served as Chairman and Chief Executive Officer of Petry Media Corp., was responsible for reengineering that company with computer technology initiatives and subsequently oversaw the acquisition of, and successful integration of, a competitor, John Blair Co. Since 2001, Mr. Burchill has provided leadership or advisory assistance to a number of early stage companies that serve the media sector, including Mitra Technologies, a traffic and billing software firm, and SB3 Inc., a media focused business intelligence firm and Venaca, Inc., a digital asset management company. Mr. Burchill has been active in a number of industry organizations, including service as Chairman of the Cable Television Advertising Bureau and as a member of the Board of Directors of both the Television Bureau of Advertising and the International Radio and Television Society. Currently, he serves as Chairman and CEO of Mediastar Ventures LLC, an advisory firm. Mr. Burchill holds degrees from Holy Cross College and the Columbia University Graduate School of Business.

Marc-Andre Boisseau has served as our Chief Financial Officer since December 2004. Since January 2002,as President of Boisseau, Felicione & Associates, Inc., he has served as an advisor to small and medium publicly traded and private companies on financial, tax and accounting matters. Between January 2000 and December 2001, he served as Vice-President Finance of DataCore Software, Inc., a privately held software developer. Prior to that, he served as Principal Accounting Officer (from May 1997 to December 1999) and Vice President Controller (from January 1, 1998 to December 1999) of Citrix Systems, Inc. a publicly traded software developer. Mr. Boisseau is a certified public accountant. Mr. Boisseau graduated with a BA degree in Business Administration in 1987 from the University of Montreal.

Edward J. O'Connor has served as a director since March 2001. Mr. O'Connor previously served as our CEO between March 2004 and October 2005 and as our President between March 2001 and January 2009 . Since December 1996 to early 2007, Mr. O'Connor has served as a director and periodically as a managing director of Capital Energy Services, LLC (formerly Orion Energy Services, LLC), which was an energy options brokerage business on the NYMEX. While serving as our President, Mr. O'Connor's primary responsibilities included negotiating and entering into contracts for our business and accounting for our funds. Mr. O'Connor graduated from Georgetown University in 1977 with a BS degree in Business Administration.

Dov Rauchwerger has served as one of our directors since November 2007 and has been involved in all aspects of business as a business owner and manager, from marketing, development and negotiations to financing and human resources. Mr. Rauchwerger re-built the electronics business of Adi-Aviv Electronics, an electronic wholesale and distribution business, where he served as Vice President from 2000 to 2001 and Managing Partner from 2001 to 2007. In February 2007, Mr. Rauchwerger founded, and continues to serve as the Managing Partner of, Northern Lights Electronics, a full service consumer electronics wholesaler, distributor and reseller. Mr. Rauchwerger graduated magnum cum laude with a Bachelor of Arts degree from Rollins College in May 1998.

Andrew Samaan has served as one of our directors since January 2009. Mr. Samaan is an attorney with expertise in capital formation, transaction analysis, negotiation and execution. Mr. Samaan advises clients on corporate transactions, and various other transactions from both a financial and legal perspective. Mr. Samaan also advises entities and individuals involved in the sports industry on a variety of legal matters, including the representation of investor groups and owners in the acquisition and sale of minor league sports franchises. Aside from his expertise in representing investors and owners, Mr. Samaan has extensive experience in corporate transactional work. He has worked in excess of $5 billion in mergers and acquisitions transactions and issuance of corporate securities on behalf of U.S. and international corporations. Mr. Samaan has advised new media companies in capital formation, intellectual property matters and on-going operations.

Mr. Samaan currently works as Principal at Columbia Sports Group, a financial advisory firm specializing in professional minor league sports organization, which he joined in October 2008., Mr. Samaan worked in various high level positions from April 1998 to September 2008 for Venaca, Inc., a media technology company. Additionally, Mr. Samaan worked for Prudential Securities Inc. from May 1997 to April 1999, where he provided middle market companies with sell side, buy side and defense advisory services. Mr. Samaan also worked as a corporate securities lawyer in New York and London for Brown & Wood, LLP and provided counsel on the issuance of corporate securities to U.S. and international corporations.

Mr. Samaan earned a Bachelor of Arts degree in Political Science from Loyola College and his Juris Doctor/MBA from Fordham University. He is a member of the American Bar Association, the New York State Bar Association and the New York City Bar Association. Mr. Samaan is licensed to practice law in New York, Connecticut and the District of Columbia.

Director Nominees

On February 6, 2009, the Board of Directors nominated Mr. Boisseau, Mr. Burchill, Mr. O’Connor and Mr. Samaan to be its candidates for the Board of Directors at the 2009 annual meeting of stockholders.

DIRECTOR INDEPENDENCE, COMMITTEES OF THE BOARD OF DIRECTORS

Two of our members of our Board of Directors, Dov Rauchwerger and Andrew Samaan are "independent" within the meaning of Nasdaq Marketplace Rule 4200. We have not established any committees, including an Audit Committee, a Compensation Committee, a Nominating Committee, or any committee performing a similar function. The functions of those committees are being undertaken by the entire board as a whole. Due to the size of the Board and the Company’s limited resources, our Board of Directors believes that the establishment of such committees of the Board is unnecessary and could be considered more form than substance.

On January 28, 2009, our Board of Directors established a special committee of three directors to review and respond to Mark Nordlicht’s repeated requests to renegotiate a promissory note issued by the Company to Mr. Nordlicht on March 22, 2004 (the “Note”). The Note matures in 2014 and currently has an outstanding balance of approximately $5 million. While the Note is not currently payable or in default, the Company believes that it may be able to obtain a favorable resolution to a number of continuing disputes with Mr. Nordlicht regarding the satisfaction of the Note at a discount, the management and the future direction of the Company. Mr. Nordlicht was one of the Company’s founders and is currently a major stockholder. The special committee has commenced negotiations with Mr. Nordlicht but there can be no assurance that a definitive agreement will be achieved. Members of the special committee are Thomas Burchill, Dov Rauchwerger and Andrew Samaan, each of whom confirmed that they are independent of Mr. Nordlicht.

FAMILY RELATIONSHIPS

There are no family relationships among our executive officers and directors.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

We are required to identify each person who was an officer, director or beneficial owner of more than 10% of our registered equity securities during our most recent fiscal year and who failed to file on a timely basis reports required by Section 16(a) of the Securities Exchange Act of 1934.

To our knowledge, based solely on review of these filings and written representations from certain of the reporting persons, we believe that during the fiscal year ended December 31, 2008, our officers, directors and significant stockholders have timely filed all required forms under Section 16(a) of the Exchange Act.

Code of Business Conduct and Ethics

We have adopted a Code of Business Conduct and Ethics to provide guiding principles to all of our employees. Our Code of Business Conduct and Ethics does not cover every issue that may arise, but it sets out basic principles to guide our employees and provides that all of our employees must conduct themselves accordingly and seek to avoid even the appearance of improper behavior. Any employee which violates our Code of Business Conduct and Ethics will be subject to disciplinary action, up to an including termination of his or her employment. Generally, our Code of Business Conduct and Ethics provides guidelines regarding:

compliance with laws, rules and regulations,

conflicts of interest,

insider trading,

corporate opportunities,

competition and fair dealing,

discrimination and harassment,

health and safety,

record keeping,

confidentiality,

protection and proper use of company assets,

payments to government personnel,

waivers of the Code of Business Conduct and Ethics,

reporting any illegal or unethical behavior, and

compliance procedures.

In addition, we have also adopted a Code of Ethics for our Chief Executive Officer and Senior Financial Officers. In addition to our Code of Business Conduct and Ethics, our CEO and senior financial officers are also subject to specific policies regarding:

disclosures made in our filings with the SEC,

deficiencies in internal controls or fraud involving management or other employees who have a significant role in our financial reporting, disclosure or internal controls,

conflicts of interests, and

knowledge of material violations of securities or other laws, rules or regulations to which we are subject.

A copy of the Code of Ethics is filed as an exhibit to our annual report for the fiscal year ended December 31, 2005 as Exhibit 14.1. The Code of Ethics is also posted on our website under Governance Documents under the investor relations section of our website: www.optionable.com

ITEM 11. EXECUTIVE COMPENSATION.

The following table summarizes all compensation recorded by us in each of the last two completed fiscal years for our principal executive officer, each other executive officer serving as such whose annual compensation exceeded $100,000 and up to two additional individuals for whom disclosure would have been made in this table but for the fact that the individual was not serving as an executive officer of our company at December 31, 2008. The value attributable to any option awards is computed in accordance with FAS 123R.

Name and Principal Position	Year	Salary ($)	Bonus ($)	Stock Awards	Option Awards ($)	Non-Equity Incentive Plan Compensation ($)	Non-Qualified Deferred Compen-sation	All Other Compensation ($)	Total ($)
Edward O’Connor President and Director (1)(6)	2008 2007	200,000 200,000	0 0	0 0	0 0	0 0	0 0	16,703 15,511	216,703 215,511
Kevin Cassidy CEO, Vice-Chairman, and Director (2)(3)	2008 2007	0 150,000	0	0 187,672	0 248,750	0 454,967	0 0	0 5,016	0 1,046,405
Albert Helmig Executive Chairman and Director (4)	2008 2007	0 397,000	0 0	0 0	0 0	0 0	0 0	0 0	0 397,000
Marc-Andre Boisseau Chief Financial Officer	2008 2007	121,306 185,327	0 0	0 0	0 0	0 0	0 0	0 0	121,306 185,327
Thomas Schnell (5)(6)	2008 2007	0 107,416	0 0	0 0	0 0	0 888,524	0 0	0 11,575	0 1,007,515

(1) Mr. O'Connor served as our principal executive officer from November 6, 2007 through January 28, 2009.

(2) Mr. Cassidy served as our principal executive officer, Chief Executive Officer, Vice Chairman and Director between October 30, 2005 and May 12, 2007.

(3) Mr. Cassidy's compensation included30,689 and 268,083 shares of common stock issued during 2007 and 2006, respectively. It included 1,200,000 warrants issued to Pierpont Capital, Inc., exercisable at $0.95 and for which we recognized $120,000 and $240,000 in compensation expenses during 2007 and 2006, respectively, pursuant to FAS 123 (R ). It also included the fair value of 65,000 options for which we recognized $128,750 in compensation expenses during 2007. Additionally, the Company paid, on behalf of Mr. Cassidy, a life insurance and health insurance premium, which are included in other compensation.

(4) Mr. Albert Helmig has served as our principal executive officer and Executive Chairman between May 11 and November 6, 2007.

(5) The other compensation of Mesrrs. O'Connor and Schnell represent the health insurance premium paid by the Company on their behalf.

(6) Mr. Schnell was a broker and was not an executive officer of the Company. Mr. Schnell resigned on September 14, 2007.

EMPLOYMENT AGREEMENTS

On March 1, 2001, we entered into an employment agreement with Edward O'Connor, one of our directors who previously served as our President. The agreement was amended on April 1, 2004.The terms of the agreement, as amended, provide that we would employ Mr. O'Connor for a term of five years with the duties of Chief Executive Officer with an annual salary of $200,000 per year. If we terminate Mr. O'Connor's employment without "cause" or if Mr. O'Connor terminates his employment with "good reason" (as both terms are defined in Mr. O'Connor's employment agreement), we are required to pay him a lump sum equal to nine months' base salary. Following termination of employment for any reason, other than expiration of the term of employment, Mr. O'Connor has agreed not to engage in an electronic OTC business in competition with us for a 90 day period, provided we pay him bi-monthly installments of $8,333.33 and provide full health benefits during the 90 day period. In October 2005, as discussed below, we continued to employ Mr.O'Connor as our President with the same compensation package as when he was our Chief Executive Officer. On January 28, 2009, Edward O’Connor resigned as President effective immediately and will continue to serve as a Director of the Company until such time as his successor is duly nominated and elected. In connection with Mr. O’Connor’s resignation, the Company and Mr. O’Connor entered into a Separation Agreement (the “Separation Agreement”) pursuant to which we agreed to provide Mr. O’Connor with a monthly severance in the amount of $2,083.33 (net of applicable withholding) for twelve consecutive months. Pursuant to the terms of the Separation Agreement, we agreed to maintain sufficient resources to indemnify Mr. O’Connor in any threatened or pending action, suit or proceeding brought against him by reason of the fact that he was an officer or director or similar capacity of the Company. The Separation Agreement also contains mutual non-disparagement, mutual release, non-compete and confidentiality provisions. Mr. O’Connor recused himself from the Board vote to approve his Separation Agreement.

We have a consulting agreement with Mr. Boisseau, who serves as our Chief Financial Officer. The verbal agreement provides that we compensate him at $300 per hour, since May 14, 2007. The rate per hour between January 1 and March 6, 2007, amounted to $145 per hour and between March 7 and May 13, 2007, $152 per hour. This agreement may be terminated at will by both parties.

On January 28, 2009, in connection with the appointment of Mr. Burchill to serve as President and CEO we entered into an employment agreement with Mr. Burchill dated January 28, 2009. The Employment Agreement provides for an annual salary of $150,000 and a year-end incentive pay of up to 100% of the base salary based upon criteria to be established by the Board of Directors. The Employment Agreement also provides for a signing bonus of $30,000 and the grant of an option to purchase 250,000 shares of the Company’s common stock at a price of $0.016, which is equal to at least 100% of the closing price of the Company’s stock on January 28, 2009. The Employment Agreement may be terminated at will by either party upon 30 days notice, except that no such notice is required if terminated by the Company for cause as defined in the Employment Agreement. The Employment Agreement also provides for the payment of severance in the amount of six months base salary and benefits, plus the pro rata amount of any incentive pay that the Board may give based upon a criteria to be determined by the Board, if Mr. Burchill resigns for good reason, as defined in the Employment Agreement, or if the Company terminates for any reason other than cause, as defined in the Employment Agreement.

Outstanding Equity Awards at Fiscal Year-End Table.

The following table sets forth information with respect to grants of options to purchase our common stock to the named executive officers at December 31, 2008.

None

Director Compensation

The following table sets forth with respect to the named directors, compensation information inclusive of equity awards and payments made for the fiscal year ended December 31, 2008.

Name (a)

Fees Earned or Paid in Cash ($) (b)

Stock Awards ($) (c)

Option Awards ($) (d)

Non-Equity Incentive Plan Compensation ($) (e)

Change in Pension Value and Nonqualified Deferred Compensation Earnings (f)

Director Compensation

During November 2007, the Company's Board of Directors approved compensation to be paid to the Messrs. Burchill and Rauchwerger in return for their service on the Board. The Board also approved a letter agreement with each of Messrs. Burchill and Rauchwerger which sets forth their compensation for their service on the Board. The Company will pay Mr. Burchill $100,000 as annual compensation to be paid in 12 equal monthly payments. The Company will pay Mr. Rauchwerger $25,000 as annual compensation to be paid in 12 equal monthly installments. The Company’s Board of Directors has also approved a letter agreement which provides for an annual compensation to Mr. Samaan of $25,000 payable in 12 equal monthly payments. During November 2007, the Board also approved a grant of 250,000 options to each of Messrs. Burchill and Rauchwerger. 50,000 options of each of such grant vested upon the grant and the remainder will vest at a rate of 50,000 options on each six month anniversary of the grant through November 26, 2009. The options expire on the five year anniversary of the grant. The Company entered into a stock option agreement with Messrs. Burchill and Rauchwerger in the form approved by the Board (each, a "Stock Option Agreement").

All of our directors are reimbursed for their reasonable expenses for attending board and board committee meetings

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of February 10, 2009, the number of and percent of our common stock beneficially owned by:

·	all directors and nominees, naming them,

·	our executive officers,

·	our directors and executive officers as a group, without naming them, and

·	persons or groups known by us to own beneficially 5% or more of our common stock:

We believe that all persons named in the table have sole voting and investment power (or shares such powers with his or her spouse) with respect to all shares of common stock beneficially owned by them.

A person is deemed to be the beneficial owner of securities if that person has the power to vote or dispose of such securities or if that person can acquire such securities within 60 days from February 10, 2009 upon the exercise of options, warrants, convertible securities or other rights. Each beneficial owner's percentage ownership is determined by assuming that options, warrants or convertible securities that are held by him, but not those held by any other person, and which are exercisable within 60 days of February 10, 2009 have been exercised and converted.

Title of Class	Name and address of Beneficial Owner	Number of Shares Beneficially Owned	Percent of Total*
Common Stock	Edward O’Connor (1) 95 Croton Avenue Suite 32 Ossining, NY 10562	3,854,130	7.4%

Common Stock	Marc-Andre Boisseau 95 Croton Avenue Suite 32 Ossining, NY 10562	0	0.0%

Common Stock	Thomas Burchill (2) 95 Croton Avenue Suite 32 Ossining, NY 10562	200,000	0.4%

Common Stock	Dov Rauchwerger (2) 95 Croton Avenue Suite 32 Ossining, NY 10562	150,000	0.3%

Common Stock	Mark Nordlicht 159 Wykagil Terrace New Rochelle, NY 10804	8,190,150	15.6%

Common Stock	Nymex Holdings, Inc. One, North End Avenue World Financial Center New York, NY 10282	10,758,886	20.52%

Common Stock	All Executive Officers and Directors as a Group (4 persons )	4,154,130	8.0%

* Based upon 52,428,203 shares outstanding as of February 10, 2009

(1) Includes 2,682,201 shares owned by Ridgecrest Capital Corp., Inc., a corporation wholly owned by Mr. O'Connor, 901,929 shares owned by Mr. O'Connor's daughter Kathleen O'Connor and 901,929 shares owned by Mr. O'Connor's daughter Erin O'Connor. Mr. O’Connor disclaims beneficial ownership of his daughters’ shares.

(2) Includes shares issuable pursuant to the exercise of stock options exercisable within 60 days.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

During April 2005, we modified the terms of agreement under which we initially owed $5,762,753, $765,000 and $765,000 to Mark Nordlicht, our Chairman of the Board, Kevin Cassidy, our Chief Executive Officer, and Edward O'Connor, our President, respectively. The modified terms provide that, among other things, in the event of a Capital Raise-defined as we raising more than $1,000,000 additional equity or debt financing, the interest rate accrued after such event is reduced from 12% to 4.68%. Additionally, the modified terms provide that we may make principal repayments towards the due to Chairman of the Board, the due to its Chief Executive Officer, and the due to related party amounting to approximately 25% of its cash flows from operating cash flows less capital expenditures. During 2006, we modified the terms of the agreements to allow prepayments at our discretion.

We were party to a Master Services Agreement with CES pursuant to which we provide brokerage services on the floor of the New York Mercantile Exchange . Edward J. O'Connor, our former President and a director, is a 50% stockholder of CES. Kevin P. Cassidy our former Chief Executive Officer until May 2007, is the Managing Director of CES. Pursuant to this arrangement, we were paying to CES a minimum annual fixed fee of $50,000 and assume all expenses directly incurred by CES's associated floor brokerage services. Additionally, we owed to CES $1,525,000 payable on April 1, 2014. However, upon a Capital Raise, we will pay up to 10.67% of the amount raised during the Capital Raise, up to $762,500, to CES, with the remaining principal and accrued interest of 12% from the date of the Capital Raise payable on April 1, 2014.

During April 2005, CES assigned its rights to the Company's liability of $1,525,000 equally to Edward O'Connor and Kevin Cassidy, co-owners of CES. Subsequently, during April 2005, the Company entered into modifications of the terms of the amounts due from it to Mark Nordlicht, Edward O'Connor and Kevin Cassidy. The modified terms provide that, among other things, in the event of a Capital Raise, the interest rate accrued after such event is reduced from 12% to 4.68%. Additionally, the Company may make principal repayments towards such liabilities amounting to approximately 25% of its quarterly cash flows from operating activities less capital expenditures.

Pursuant to this arrangement, our share of revenues and expenses of the floor brokerage services amounted to approximately $901,000 and $15,000, respectively, during 2007. We have received $1.5 million from CES in connection with such floor brokerage services during 2007,. In April 2007, the Company reimbursed CES approximately $165,000 for commissions to a broker that CES paid on the Company's behalf. All obligations pursuant to this arrangement have been satisified as of December 31, 2007 This agreement was terminated in January 2007 and our floor operations were assumed by one of our subsidiaries, OPEX International, Inc.

The Company has recognized revenues from brokerage commissions of approximately $253,000 and $3,000 during 2007 from Platinum Partners, L.P. and Fenmore Holdings LLC, respectively, entities in which Mark Nordlicht is also the managing partner or a stockholder. All obligations from such related parties have been satisfied at December 31, 2007.

Jules Nordlicht, the father of the Company's former Chairman of the Board, leased to us a seat on the exchange through which CES maintained its floor operations. We assumed the cost of the lease in April 2006 and renewed it in December 2006 through June 2007. We terminated this agreement effective April 1, 2007. The lease provided for monthly payments of $5,000 through June 30, 2007. The amount paid pursuant to the lease amounted to $15,000 during 2007.

We also received incentives from NYMEX, a stockholder (the "Investor"). The incentives are earned based on a percentage of the total revenues received by the exchange attributable to our volume of OTC market transactions submitted to the respective exchanges. Under this incentive program offered by NYMEX, 25% of the revenues from NYMEX ClearPort are allocated to an intermediary incentive pool. At the end of each quarter, the qualifying intermediaries, including us, receive their pro-rata share based on the volume for which they were responsible. There is no minimum volume requirement in order to participate. The Company recognized revenues from incentives amounting to approximately $3.3 million during 2007. The Company received approximately $2.0 million from the Investor, pursuant to such incentive arrangement during 2007. NYMEX owes us approximately $641,000 at December 31, 2008 and, after several requests, have not indicated to us whether they will ever satisfy their obligations to us or when.

On April 10, 2007, we, Mark Nordlicht, our former Chairman of the Board, Kevin Cassidy, our former Vice Chairman and Chief Executive Officer, Edward O'Connor, our former President and a Director, (together with Mr. Nordlicht and Mr. Cassidy, the "Founding Stockholders"), and NYMEX Holdings, Inc. (the "Investor") entered into a definitive stock and warrant purchase agreement (the "Stock and Warrant Purchase Agreement").

Pursuant to the terms of the Stock and Warrant Purchase Agreement, Mr. Nordlicht, Mr. Cassidy and Mr. O'Connor sold to the Investor, 7,000,000, 1,905,000 and 1,853,886 shares, respectively, of common stock of the Company. This aggregate of 10,758,886 shares of common stock (the "Purchased Shares") represented 19% of the then outstanding shares of common stock on a fully diluted basis (without giving effect to the Warrant, as defined and discussed below). The purchase price paid by the Investor for the Purchased Shares was $2.69 per share. Additionally, pursuant to the Stock and Warrant Purchase Agreement, we physically issued to the Investor the Warrant, as defined and described below, in consideration of the Investor's agreement (i) to develop with us a marketing plan, which plan will detail proposed expenditures by the Investor and joint activities; (ii) subject to regulatory requirements, to provide space for up to twenty of our brokers on the Investor's trading floor; and (iii) to host our electronic trading platform, OPEX, in the Investor's data center and provide us with computer and networking hardware, software, bandwidth and ancillary infrastructure and services reasonably necessary to interconnect OPEX with the Investor's clearing system market gateway to trading and clearing services. Additionally, we agreed to exclusively clear all OTC products through the Investor's clearing system for a period of ten years (provided that the Investor continues to offer clearance for a particular product through its clearing system) in consideration for additional fees to be paid by the Investor to us.

The warrant issued by us (the "Warrant") permitted the Investor to purchase a number of shares of common stock sufficient to increase the Investor's ownership of the Company's common stock to an amount not to exceed 40% of the Company's then outstanding common stock on a fully diluted basis, based on the assumption that the Investor has retained ownership of the Purchased Shares and any shares of common stock previously issued to the Investor upon a partial exercise of the Warrant. The Warrant is exercisable at any time and from time to time prior to October 10, 2008 at an exercise price per share equal to $4.30 (the "Exercise Price"). The Warrant does not contain a cashless exercise feature. The Exercise Price is subject to certain customary adjustments to protect against dilution.

In connection with the consummation of the transactions contemplated by the Stock and Warrant Purchase Agreement , the Company, the Investor and the Founding Stockholders also entered into an Investor Rights Agreement, also dated April 10, 2007 (the "Investor Rights Agreement"), pursuant to which, for so long as the Investor owns at least 5,379,443 shares of common stock:

(a) the Investor is entitled to designate one person (reasonably acceptable to the Company) that we are required to nominate as a member of the our board of directors (the "Investor Director");

(b) each of the Founding Stockholders are required to vote their shares in favor of the election of the Investor's designee as one our directors;

(c) the Investor is required to vote its shares in favor of each individual nominated for election as a member of our board of directors by our board of directors, by our nominating committee or such other ad hoc committee as may be acting in such nominating role;

(d) subject to certain permitted threshold amounts, the consent of the Investor Director (which may not be unreasonably withheld) is required before we may take certain actions, including (1) issuances of shares of a class of stock ranking senior to the common stock, (2) acquisitions of businesses or assets, (3) entry into related party transactions, (4) the declaration or payment of dividends or distributions on or with respect to, or the optionable redemption of, capital stock or the issuance of debt and (5) entry into any business which is not similar, ancillary or related to any of the businesses in which we are currently engaged;

(e) each of the Founding Stockholders and the Investor have certain rights of first refusal to purchase or subscribe for their pro rata percentage of shares in certain subsequent sales by us of common stock and/or certain other securities convertible into or exchangeable for common stock;

(f) each of the Founding Stockholders and the Investor have certain rights of first refusal with respect to proposed sales of our common stock by the others; and

(g) before they may accept any offer by an independent third party to acquire fifty percent (50%) or more of the total voting power of our common stock, the Founding Stockholders and we are required to provide notice of such offer to the Investor and permit the Investor a period of 10 days to make its own offer.

The Investor Rights Agreement additionally requires the Investor to refrain from purchasing any additional shares of our common stock, with certain limited exceptions, until April 10, 2008.

The Company and the Investor also entered into a registration rights agreement, dated April 10, 2007 (the "Registration Rights Agreement"), pursuant to which, among other things, we have provided the Investor, subject to standard exceptions, with (a) unlimited "piggyback" rights subject to standard underwriter lock-up and cutback provisions and (b) the right to two demand registrations for underwritten offerings or take downs off of a shelf registration statement, provided that (i) a minimum of $5,000,000 of our common stock is offered in such demand registration or take down and (ii) we will not be obligated to effectuate more than one underwritten offering pursuant to a demand registration by the Investor in any six-month period. In addition, if we are eligible to register our securities on Form S-3 (or any successor form then in effect), the Investor will be entitled to unlimited registrations on Form S-3 (or any successor form then in effect), including shelf registrations, provided that (a) a minimum of $5,000,000 of common stock is offered in the S-3 registration and (b) we will not be obligated to effect more than two S-3 registrations in any twelve month period. An S-3 registration will not count as a demand registration, unless such registration is for an underwritten offering or an underwritten take down off of an existing, effective shelf registration statement.

As a condition to the Investor's obligation to consummate the transactions contemplated by the Stock and Warrant Purchase Agreement, Mr. Nordlicht executed an agreement, dated April 10, 2007 (the "Waiver"), waiving any obligation on the part of the Company to make any prepayment of principal, or to begin paying interest upon amounts due to Mr. Nordlicht, under the Loan Agreement between him and the Company, dated March 2004, as a result of any exercise by the Investor of the Warrant. Also as a condition to the Investor's obligation to consummate the transactions contemplated by the Stock and Warrant Purchase Agreement, Mr. Cassidy and the Company entered into an Amended and Restated Employment Agreement and Mr. O'Connor entered into a Non-Competition Agreement, dated April 10, 2007, with the Company, pursuant to which Mr. O'Connor agreed not to disclose or use the Company's confidential information and, for a period of nine months following the termination of Mr. O'Connor's employment, not to compete with the Company or solicit certain customers of the Company.

Pursuant to our final agreements with the Investor in April 2007, we physically issued to the Investor warrants which will permit the Investor to purchase a number of shares of common stock sufficient to increase its ownership to an amount not to exceed 40% of our then outstanding common stock on a fully diluted basis, based on the assumption that the Investor has retained ownership of the Purchased Shares and any shares of common stock previously issued to the Investor upon a partial exercise of the Warrant. The Warrant will be exercisable from time to time for a period of 18 months from the closing date of the final agreement at an exercise price per share equal to $4.30 (the "Exercise Price"). The Exercise Price will be subject to certain customary adjustments to protect against dilution.

The number of warrants issued to NYMEX may increase or decrease from time to time until October 2008, depending on whether we issue additional shares, options, and warrants, repurchase treasury shares, or certain outstanding options and warrants expire or become unexercisable. Because the number of shares will vary from time to time, the fair value of the warrants issued pursuant to our agreement and the related amortization may also vary from time to time, until October 2008.

Following the occurrence of the events which are subject of the matters discussed in Item 1 of Part II of this Report "Legal Proceedings," we have not agreed with the Investor on the joint marketing and technology initiatives discussed, above. Additionally, the Investor indicated in a Schedule 13D it filed with the SEC on July 6, 2007, with respect to its holdings of equity securities of the Company, that it was now re-considering its potential joint marketing and technology initiatives with the Company. As a result, the Investor and the Company have not developed the contemplated joint marketing and technology initiatives.

The sale of the Purchased Shares by the Founding Stockholders in an agreement in which the Company would benefit from the Consideration constitutes a shared-based payment transaction. As such, the Company established that the fair value of the Purchased Shares is more reliably measurable than the Consideration from the Investor.

The fair value of the Consideration attributable to the Purchased Shares represents the difference between the market value of the Purchased Shares at the date of the Stock and Warrant Purchase Agreement, as quoted on the Over-the-Counter Bulletin Board, and the disposition proceeds of the Purchased Shares. The fair value of the Consideration at April 10, 2007 amounted to $49,490,876 and was initially recorded as capital contribution from the Founding Stockholders.

The fair value of the Consideration attributable to the Warrant amounted to $99,594,000.

However, at June 30, 2007, based upon the statements made by the Investor, the Company was unable to assert that it would receive any of the benefits initially contemplated by the Stock and Warrant Purchase Agreement. Accordingly, the Company has recorded a charge to its statement of operations amounting to approximately $145.8 million, at June 30, 2007.

Pursuant to an agreement providing for the reimbursement of certain administrative expenses for services provided to a coffee bean roaster, Sleepy Hollow Coffee Roasters, Inc. ("Sleepy Hollow"), a company owned by Edward J. O'Connor and by Kevin P. Cassidy, we charged an administrative fee of $8,000 to Sleepy Hollow during 2007. We provided such services to Sleepy Hollow to ensure that Edward O'Connor and Kevin Cassidy can focus as much time and efforts as possible on our operations. This agreement was terminated by both parties effective June 30, 2007.

At December 31, 2008, we owe approximately $98,000 to a Mark Nordhlicht for certain legal fees incurred and paid by him in connection with legal matters for which he is entitled to be indemnified.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The firm Sherb & Co., LLP, independent registered accounting firm, has audited our financial statements for the years ended December 31, 2008 and 2007. The Board of Directors has appointed Sherb & Co. to serve as our registered accounting firm for the 2008 year-end audit and to review our quarterly financial reports for filing with the Securities and Exchange Commission during fiscal year 2009. The following table shows the fees paid or accrued by us for the audit and other services provided by Sherb & Co. for fiscal year 2008 and 2007.

	2008		2007
Audit Fees (1)	$	75,000	$	78,000
Audit-Related Fees	$	--	$	--
Tax Fees	$	--	$	--
All Other Fees (2)	$	--	$	2,580
Total	$	75,000	$	80,580

(1) Audit fees represent fees for professional services provided in connection with the audit of our annual financial statements and review of our quarterly financial statements and audit services provided in connection with other statutory or regulatory filings.

(2) All Other Fees represent edgarization services related to the certain statutory and regulatory filings.

AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES

The board of directors acts as the audit committee, and consults with respect to audit policy, choice of auditors, and approval of out of the ordinary financial transactions.

ITEM 15. EXHIBITS.

Exhibit No.		Description

3.1		Certificate of Incorporation of Optionable, Inc., dated February 4, 2000 (incorporated by reference to Exhibit 3(i)(a)to the Registrant's Registration Statement on Form SB-2, filed December 22, 2004, file no. 333-121543 (the "SB-2").

3.2		Certificate of Amendment to the Certificate of Incorporation of Optionable, Inc., dated March 30, 2000 (incorporated by reference to Exhibit 3(i)(b) to the SB-2)

3.3		Certificate of Amendment to the Certificate of Incorporation of Optionable, Inc., dated May 31, 2000 (incorporated by reference to Exhibit 3(i)(c) to the SB-2).

3.4		Certificate of Amendment to the Certificate of Incorporation of Optionable, Inc., dated July 21, 2000 (incorporated by reference to Exhibit 3(i)(d) to the SB-2).

3.5		Corrected Certificate of Amendment to the Certificate of Incorporation of Optionable, Inc., dated January 31, 2003 (incorporated by reference to Exhibit 3(i)(e) to the SB-2).

3.6		Certificate of Amendment to the Certificate of Incorporatin of Optionable, Inc., dated June 9, 2004 (incorporated by reference to Exhibit 3(i)(f) to the SB-2).

3.7		Amended and Restated By-laws of Optionable, Inc. (incorporated by reference to Exhibit 3(ii) to the SB-2)

10.1		Lease Agreement between 24 South Third Avenue Corp. and 60 3rd Ave. Corp., as Lessor, and Optionable, Inc., as Lessee, dated October 3, 2001 (incorporated by reference to Exhibit 10(i) to the SB-2)

10.2		Master Services Agreement with Capital Energy Services LLC dated April 1, 2004 including the Consulting Agreement as a part thereof and Addendum, dated October 7, 2004 (incorporated by reference to Exhibit 10(ii)(a) to the SB-2)

10.3		Addendum to Master Services Agreement (incorporated by reference to Exhibit 10(ii)(b) to the SB-2)

10.4		Amendment to Master Services Agreement (incorporated reference to the Registrant's Current Report on Form 8-K, dated as of April 10, 2006)

10.5		Termination Agreement (of Master Service Agreement; incorporated by reference to the Registrant's Current Report of Form 8-K, dated as of January 31, 2007)

10.6		Options Order Flow Agreement, dated July 1, 2004, between the Company and Intercontinental Exchange,Inc. (incorporated by reference to Exhibit 10(iii)(a) to the SB-2)

10.7		Superseding Option Order Flow Agreement, dated as of March 2, 2005 (incorporated by reference to Exhibit 10(iii)(b) to the SB-2)

10.8		Employment Agreement, as amended, between the Company and Edward J. O'Connor (incorporated by reference to Exhibit 10(iv) (a) to the SB-2)

10.9		Optionable, Inc. 2004 Stock Option Plan (incorporated by reference to Exhibit 4.1 to the Registrant's Registration Statement on Form S-8, file number 333-129853, as filed on November 21, 2005 (the "S-8")

10.10		Form of Incentive Stock Option Agreement(incorporated by reference to Exhibit 4.2 to the S-8)

10.11		Nonstatutory Stock Option Agreement(incorporated by reference to Exhibit 4.3 to the S-8)

10.12		Prepaid Commission Agreement, dated February 3, 2003, between the Company and Mark Nordlicht (incorporated by reference to Exhibit 10(vi) to the SB-2).

10.13		Revolving Credit Facility Agreement, dated June 5, 2003, between the Company and Platinum Value Arbitrage Fund LP(incorporated by reference to Exhibit 10(vii)(a) to the SB-2)

10.14		$500,000 Revolving Promissory Note from the Company to Platinum Value Arbitrage Fund LP dated June 5, 2003 (incorporated by reference to Exhibit 10(vii)(b) to the SB-2)

10.15		Prepaid Commission Agreement, dated June 9, 2003, between the Company and Platinum Partners Value Arbitrage Fund LLP(incorporated by reference to Exhibit 10(viii) to the SB-2)

10.16		Loan Agreement, dated February 13, 2004, between the Company and Mark Nordlicht (incorporated by reference to Exhibit 10(ix)(a) to the SB-2)

10.17		$250,000 Promissory Note, dated February 13, 2004, from the Company to Mark Nordlicht (incorporated by reference to Exhibit 10(ix)(b) to the SB-2)

10.18		$250,000 Promissory Note Extension Agreement, dated September 9, 2004 (incorporated by reference to Exhibit 10(ix)(c) to the SB-2)

10.19		Loan Agreement, dated March 8, 2004, between the Company and Mark Nordlicht (incorporated by reference to Exhibit 10(x)(a) to the SB-2)

10.20		$50,000 Promissory Note, dated March 8, 2004, from the Company to Mark Nordlicht (incorporated by reference to Exhibit 10(x)(b) to the SB-2)

10.21		$50,000 Promissory Note Extension Agreement, dated September 9, 2004 (incorporated by reference to Exhibit 10(x)(c) to the SB-2)

10.22		Loan Agreement, dated March 22, 2004, between the Company and Mark Nordlicht (incorporated by reference to Exhibit 10(xi)(a) to the SB-2)

10.23		$5,621,753.18 Promissory Note, dated March 22, 2004, from the Company to Mark Nordlicht (incorporated by reference to Exhibit 10(xi)(b) to the SB-2)

10.24		Addendum to Loan Agreement, dated March 22, 2004 (incorporated by reference to Exhibit 10(xi)(c) to the SB-2)

10.25		Addendum to Promissory Note, dated March 22, 2004 (incorporated by reference to Exhibit 10(xi)(d) to the SB-2)

10.26		Revolving Credit Facility Agreement, dated April 15, 2004, between the Company and Mark Nordlicht (incorporated by reference to Exhibit 10(xii)(a) to the SB-2)

10.27		$50,000 Promissory Note, dated April 15, 2004, from the Company to Mark Nordlicht (incorporated by reference to Exhibit 10(xii)(b) to the SB-2)

10.28		Warrant Agreement for the Purchase of Common Stock (incorporated by reference to the Registrant's Quarterly Report on Form 10-QSB for the quarterly period ended March 31, 2006)

10.29		Service and Repurchase Agreement (incorporated by reference to the Registrant's Current Report on Form 8-K, dated as of January 31, 2007

10.30		Code of Business Conduct and Ethics (Incorporated by reference to the Registrant’s Form 10-KSB for the fiscal year ended December 31, 2007)

10.31		Acquisition Agreement, dated March 23, 2007, between the Company, Peter Holmquist, Douglas Towne, and Joseph McHugh (incorporated by reference to the Registrant's Current Report on Form 8-K, dated as of March 23, 2007.

10.32		Release, Rescission and Termination Agreement, dated May 18, 2007, by and among Optionable, Inc., Peter Holmquist, Douglas Towne, Joseph McHugh and Nicole Troiani (incorporated by reference to the Registrant's Current Report on Form 8-K, dated as of May 18, 2007.

10.33		Separation and Release Agreement, dated July 25, 2007, by and among Optionable, Inc., Opex International, Inc., Kevin DeAndrea, Noah Rothblatt, Kevin Brennan and Nicole Troiani. (incorporated by reference to the Registrant's Current Report on Form 8-K, dated as of July 25, 2007).

10.34		Warrant, dated April 10, 2007, issued pursuant to that certain Stock and Warrant Purchase Agreement, dated April 10, 2007, by and among Optionable, Inc., NYMEX Holdings, Inc., Mark Nordlicht, Kevin Cassidy through Pierpont Capital, Inc. and Edward O'Connor through Ridgecrest Capital, Inc. (incorporated by reference to the Registrant's Quarterly Report on Form 10-QSB for the quarterly period ended June 30, 2007)

10.35		Stock and Warrant Purchase Agreement, dated April 10, 2007, by and among Optionable, Inc., NYMEX Holdings, Inc., Mark Nordlicht, Kevin Cassidy through Pierpont Capital, Inc. and Edward O'Connor through Ridgecrest Capital, Inc.(portions of this exhibit are subject to a confidential treatment request) (incorporated by reference to the Registrant's Quarterly Report on Form 10-QSB for the quarterly period ended June 30, 2007)


10.36		Investor Rights Agreement, dated April 10, 2007, by and among Optionable, Inc., NYMEX Holdings, Inc., Mark Nordlicht, Kevin Cassidy and Edward O'Connor. (incorporated by reference to the Registrant's Quarterly Report on Form 10-QSB for the quarterly period ended June 30, 2007)

10.37		Waiver, dated April 10, 2007, by and between Optionable, Inc. and Mark Nordlicht, to that certain Loan Agreement, dated March 22, 2004, by and between Optionable, Inc. and Mark Nordlicht. (incorporated by reference to the Registrant's Quarterly Report on Form 10-QSB for the quarterly period ended June 30, 2007)

10.38		Amended and Restated Employment Agreement, dated April 10, 2007, by and between Optionable, Inc. and Kevin Cassidy. (incorporated by reference to the Registrant's Quarterly Report on Form 10-QSB for the quarterly period ended June 30, 2007)

10.39		Registration Rights Agreement, dated April 10, 2007, by and between Optionable, Inc. and NYMEX Holdings, Inc. (incorporated by reference to the Registrant's Quarterly Report on Form 10-QSB for the quarterly period ended June 30, 2007)

10.40		Separation and Release Letter, dated November 6, 2007, by and between Optionable, Inc. and Albert Helmig (incorporated by reference to the Registrant's Current Report on Form 8-K, dated as of November 6, 2007).

10.41		Letter Agreement, dated as of November 26, 2007, by and between Optionable, Inc. and Thomas Burchill. (incorporated by reference to the Registrant's Current Report on Form 8-K, dated as of November 26, 2007).

10.42		Letter Agreement, dated as of November 26, 2007, by and between Optionable, Inc. and Dov Rauchwerger. (incorporated by reference to the Registrant's Current Report on Form 8-K, dated as of November 26, 2007).

10.43		Stock Option Agreement, dated as of November 26, 2007, by and between Optionable, Inc. and Thomas Burchill. (incorporated by reference to the Registrant's Current Report on Form 8-K, dated as of November 26, 2007).

10.44		Stock Option Agreement, dated as of November 26, 2007, by and between Optionable, Inc. and Dov Rauchwerger. (incorporated by reference to the Registrant's Current Report on Form 8-K, dated as of November 26, 2007).

10.45		Separation Agreement between Optionable, Inc. and Edward J. O’Connor dated as of January 28, 2009. (incorporated by reference to the Registrant’s Current Report on Form 8-K dated as of February 2, 2009)

10.46		Employment Agreement between Optionable, Inc. and Thomas Burchill dated as of January 28, 2009(incorporated by reference to the Registrant’s Current Report on Form 8-K dated as of February 2, 2009)

10.47		Letter Agreement dated as of January 15, 2009 with respect to compensation to Andrew Samaan (incorporated by reference to the Registrant’s Current Report on Form 8-K dated as of February 2, 2009)

21*		Subsidiaries of the Company.

31.1*		Certification by Chief Executive Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act

31.2*		Certification by Interim Chief Financial Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act

32.1*		Certification by Chief Executive Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code

32.2*		Certification by Interim Chief Financial Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code

* Filed herewith

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Los Angeles, State of California, on February 17, 2009.

				Optionable, Inc.


			By:	/s/ Thomas Burchill
				Thomas Burchill
				Chief Executive Officer, President
				and Director (Principal Executive Officer)


			By:	/s/ Marc Andre-Boisseau
				Marc Andre-Boisseau
				Chief Financial Officer (Principal Financial and Accounting Officer)

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the date indicated:

Signature	Title	Date

/s/ Marc-Andre Boisseau Marc-Andre Boisseau	Chief Financial Officer	February 17, 2009

/s/ Thomas Burchill Thomas Burchill	Chief Executive Officer, President, and Director	February 17, 2009

/s/ Edward O’Connor Edward O’Connor	Director	February 17, 2009

/s/ Dov Rauchwerger Dov Rauchwerger	Director	February 17, 2009

/s/ Andrew Samaan Andrew Samaan	Director	February 17, 2009

Report of Independent Registered Public Accounting Firm	F-1

Balance Sheet	F-2

Statements of Operations	F-3

Statement of Stockholders' Equity (Deficit)	F-4

Statements of Cash Flows	F-5

Notes to Financial Statements	F-6 to F-41

							Treasury
	Common Stock				Additional		Stock,			Accumulated
	Shares		$		Paid-in Capital		at Cost			Deficit			Total

Balance at January 1, 2007		51,669,714	$	5,167	$	8,469,567	$	(2,506	)	$	(1,582,331	)	$	6,889,897

Fair value of warrants issued to related party		-		-		120,000		-			-			120,000
Fair value of share-based payments issued to shareholder		-		-		149,084,876		-			-			149,084,876
Fair value of warrants issued to acquire intangible asset		-		-		756,000		-			-			756,000
Fair value of options		-		-		3,911,401		-			-			3,911,401
Exercise of warrants		550,000		55		184,945		-			-			185,000
Exercise of options		173,000		17		34,583		-			-			34,600
Fair value of shares issued for compensation to chief executive officer		30,689		3		181,984		-			-			181,987
Net loss		-		-		-		-			(150,735,161	)		(150,735,161	)
Ending balance, December 31, 2007		52,423,403		5,242		162,743,356		(2,506	)		(152,317,492	)		10,428,600

Fair value of options		-		-		22,740		-			-			22,740
Net loss		-		-		-		-			(2,430,800	)		(2,430,800	)
Ending balance, December 31, 2008		52,423,403	$	5,242	$	162,766,096	$	(2,506	)	$	(154,748,292	)	$	8,020,540

	As of
	December 31,			December 31,
	2008			2007
	$	5,044,510		$	5,044,510
Discount, using initial implied rate of 12%:		(2,610,270	)		(2,956,314	)
	$	2,426,240		$	2,088,196


	2007

Exercise price:	$0.0918-$7.17
Market price at date of grant:	$0.0918-$7.17
Volatility:	40-52%
Expected dividend rate:	0%
Expected terms:	3-3.3 years
Risk-free interest rate:	3.07%-4.54%

				Weighted			Aggregate
				Average			Intrinsic
	Options			Exercise Price			Value

Outstanding at January 1, 2007		941,000		$	0.26

Granted		2,325,000			0.36
Exercised		123,000			0.20
Expired or cancelled		1,730,000			-
Outstanding at December 31, 2007		1,363,000			0.36

Granted		-			-
Exercised		-			-
Expired or cancelled		(380,000	)		0.26
Outstanding at December 31, 2008		983,000		$	0.46	$	-

Exercisable and vested at December 31, 2008		783,000		$	0.56	$	-

Weighted-average remaining contractual term	Number of options	Weighted-average exercise price
Earlier of termination for cause or death	283,000	$1.31
4.26 years	700,000	0.10

	2008		2007
Weighted-average grant-date fair value of options granted		N/A	$	2.44
Aggregate intrinsic value of options exercised		N/A	$	966,850
Fair value of options recognized as expense:	$	22,000	$	3,911,401

Exercise price:	$0.95
Market price at date of grant:	$0.95
Volatility:	57%
Expected dividend rate:	0%
Risk-free interest rate:	5.13%

	2007
Weighted-average grant-date fair value of warrants granted	N/A
Aggregate intrinsic value of warrants exercised	$3,172,500
Fair value of warrants recognized as expense:	$120,000

		2008		2007
Current:
Federal	$	876,661	$	103,833
State		(126,849)		30,359

Total current		749,812		134,192

Deferred:
Federal		(221,545)		221,245
State		(60,111)		60,111
		(281,356)		281,356

Total benefit (provision) for income taxes	$	468,566	$	415,548

	2008			2007
Federal statutory taxes		( 35.0	%)		(35.0	)%
State income taxes, net of federal tax benefit		( 5.7	)		(5.7	)
Change in valuation allowance		18.9			-
Permanent differences		5.6			40.5
		(16.2	)%		(0.2	)%