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Nadex, the only safe and reliable option for U.S binary options traders

How does Nadex rank with other FX providers? Let’s start with the poor bonus rating, Nadex got a zero for this, because Nadex does not offer any form of bonuses or promotions to its members. Because the Nadex exchange is regulated by the CFTC, offering bonuses are not permitted. Nadex’s trading software scored a high 95/100 due to the advanced features that the platform has over most binary platforms in the industry. The software is almost comparable to the platforms that spot forex brokers offer for the trading of currency pairs. For customer support, we awarded Nadex a score of 70/100 due to the professionalism of their support representatives. It would have been awarded a higher score had Nadex also supported their members through live chat as well. Nadex is working to provide a live chat option soon. For options choices, Nadex only scored a modest 60/100 due to the lack of choices. Nevertheless, it scored better than average as their options are traded based on a fair exchange principle between buyers and sellers with the Nadex exchange acting only as an intermediary.

Intro

Initially established in 2004 as HedgeStreet, the North American Derivatives Exchange™ or Nadex as it is known, is a subsidiary of the IG Group based in the UK. The exchange specializes in providing a safe and secure environment for binary options traders to conduct their trading activities. Unlike other binary options brokers that are based in Europe or offshore, Nadex is not a market maker. Instead, it merely acts as a facilitator or intermediary and matches the order from the buyers and sellers of binary options. In other words, there is no potential conflict of interest between Nadex and traders, as the exchange does not engage in any form of trading.

Company information

Bought by the IG Group in 2007, Hedgestreet officially became Nadex in 2009.It is regulated by the U.S Commodity Futures Trading Commission (CFTC). Its head office is located at 200 W Jackson Blvd, suite 1400, in Chicago, Illinois. For U.S binary options traders, Nadex is one of the only binary options platforms that is approved to offer this type of trading to US clients by the relevant regulatory bodies. In addition, Nadex works on a different business model from European based binary brokers. While brokers that are offering European type binary options are essentially operating as a market maker, Nadex operates on a straight through processing (STP) business model.

This mean Nadex merely acts as a platform to match the buy and sell orders from binary options traders trading on its exchange. In other words, there is no possibility of Nadex trading against you.

Trading Platform

The trading platform that Nadex has provided for binary traders, is a proprietary platform. It is available in 2 versions, as a desktop platform called “Nadex Trader” and as a mobile platform known as the “NadexGO™”. Designed to be accessible from any web browser, Nadex Trader offers its users direct market access to the binary options market with full transparency.

 

 

In terms of features and functionalities, Nadex Trader is far more advanced than any of the binary trading platforms used by brokers outside of the U.S. The platform comes with a Depth of Market view which is designed to be user friendly and intuitive. It also has a unique feature called the Market Order with Protection (MOP) that lets traders exit out or enter into a market position immediately without having to risk the order being filled at a level that is way beyond the trader’s intended price.

[blockquote]The platform also supports limit orders and so, by using this type of market order, you can wait for your order to be filled at your price.[/blockquote]

The platform also has real time charts allowing you to view actual market prices directly from the exchange. In addition, the platform comes with an advanced charting package which enhances the quality of your market analysis. Customizable and extremely reliable with an uptime of 99.9%, Nadex’s binary traders can rest assured that their trading activities will not be in any way interrupted by a failure from the Nadex Trader platform. In short, Nadex has really designed their platforms to let their traders trade in the way they wish to trade, with the trading strategies that they trust.

Mobile Platform

In addition to the desktop platform, Nadex has also made its platform available for mobile devices such as smartphones and tablets. NadexGO™  for Mobile is a Progressive Web App (PWA) that works seamlessly with the desktop platform so you can enter a trade on one device and track and manage it on another. It allows you to  trade all Nadex products and markets with full-featured charts, drawing tools, and technical indicators. NadexGO lets you trade whenever, wherever, and however you want. It’s fast, intuitive, and designed to fit your lifestyle.

Assets available

Comparatively, the range of underlying assets that is available for trading at Nadex is rather modest when compared to what offshore binary brokers have to offer to their clients. With Nadex, there is only a selection of 10 forex pairs, 8 US and Global market indices, plus commodities and economic events covered under the economic calendar.

As mentioned earlier, acts as a go-between for buyers and sellers of binary options. This is based on the principle of fair exchange, where the price is determined purely by what the buyers are willing to pay and what the sellers are willing to accept. The returns of the binary options are in turn determined by this interaction between the buyers and sellers. As such, there is no direct comparison to what European based brokers have to offer in terms of return on investment.

If we were take an option having a strike price of $100 which is being sold at $40, then theoretically the return for this option will be 120%. However if the same option is now priced at $70 instead of $40, then the return on investment will also change. In this case, the return for this option will only be 43% as opposed to 120%.

[blockquote] The prices of binary options traded on the Nadex exchange are more dynamic as opposed to the fixed price options being sold by most European binary brokers.[/blockquote]

Nevertheless, it should be noted that in terms of value, Nadex’s binaries offer more value for investment than European binaries since the returns for Nadex binaries can exceed 100%. It should be noted that the trading cost at Nadex is extremely competitive, with traders merely paying $1 per contract capped at $50. Please note that the cap does not apply to in the money trades.

Bonuses & VIP programs

Nadex does not have any notable bonuses or promotional offers. Instead of relying on gimmicks or special offers to entice traders to sign up as a member, Nadex relies more on its reputation as a legitimate and regulated exchange to grow its business. In addition, the trading accounts offered by Nadex do not discriminate on the basis of how the trader deposits into his account. Instead, trading accounts are categorized according to whether the trader is a U.S resident, an international trader or a corporate member.

Deposits and Withdrawals

Account funding and withdrawal methods will depend on whether the account holder is based in the U.S or outside of the U.S. For U.S based traders, they can fund their trading accounts through ACH transfer, bank debit cards and wire transfer. International traders on the other hand can only fund their trading accounts through bank wire transfer or their debit cards.

Withdrawals at Nadex are also processed through the same methods as those of making a deposit. The typical time required to process a withdrawal request is around 3 to 5 days. There is also a $25 service fee charged by Nadex for wire transfer withdrawals.

Customer Support

Contact Nadex customer support by phone or email, any time from 3:00 PM ET Sunday through 5:00pm ET Friday. For international traders, a separate telephone number is provided.

Extra features and resources

In terms of educational resources, Nadex has provided its members with a fairly comprehensive Learning Center. In the Learning Center, members have access to a selection of educational resources such as webinars, video tutorials, trade examples as well as handbooks.

[blockquote]The Learning Center also has a detailed FAQ and glossary section for members to refer. [/blockquote]

In addition, the News & Commentary section provides members with a quick updated overview of all the major developments happening in the markets.

Verdict

So what is our verdict on Nadex? We noted that most binary options traders used to European style binaries are confused by what Nadex has to offer them. The notion of trading binaries based on a fair exchange concept is alien to them as the binary options brokers which most of them have dealt with in the past are operating as market makers. Nevertheless, once they get past this initial hurdle, they will find that Nadex binary options are better trading vehicle and trading is conducted in a transparent manner.

With Nadex acting purely as a go-between for traders, there is no possibility of a potential conflict of interest arising. The exchange merely collects a commission of $1 per contract capped at $50, but the cap does not apply to in the money trades. Perhaps the most important of all is the fact that Nadex is regulated by the Commodity Futures Trading Commission in one of the most strictly regulated financial markets in the world.

Pros:

Cons

FAQ

Yes. It is completely safe to trade with Nadex. The exchange is regulated by the Commodity Futures Trading Commission and is perfectly legal for U.S residents to trade with.

No.  Nadex does not offer any kind of bonuses. It is not a brokerage firm but an exchange for binary options trading. It merely acts as an intermediary for buyers and sellers of binary options.

If you are a U.S resident, you can use the following methods to fund your trading account at Nadex:

For international traders, the available methods are bank wire transfer and debit cards.

The minimum initial deposit requirement at Nadex is $250.

Normally, it takes about 3 to 5 days for a withdrawal request to be completed.


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