Nadex Binary Options Trading Intro
The world has seen its fair share of binary options scams, and the increasing number of financial frauds in the industry are forcing countries to reconsider their regulatory standards to supervise the activities of financial entities. The US has strict norms and policies when it comes to financial investments, and has created an excellent binary options regulatory environment that protects investors from financial malpractices. Of course, the high amount of regulation does have its drawbacks, but any company that is regulated by the US authorities are found to be superior in almost all aspects.
Nadex is one of the most popular binary options exchange houses in the US market and enjoys a great amount of presence in virtually all countries across the globe. Nadex comes highly recommended due to their attention to detail in offering the best binary options products, and are also committed to offering the best customer service experience. For detailed trading specifications and more information on the company’s financial products, we have created a thorough Nadex review that includes all the relevant data to help you in your quest to find the best binary options broker.
Nadex Regulatory Information
Nadex has fairly strong company fundamentals and is one of the most reliable companies in the binary options market. Unlike companies that have set up shop in the US, only to exit a few years later, Nadex has been a prominent player in the US financial markets since its launch in 2004. The North American Derivatives Exchange (Nadex), is one of the very few binary options companies that is registered as an exchange, rather than an outright broker. US regulations stipulate that brokers should have no conflict of interest with traders, which is why Nadex was developed as an exchange house at the outset.
Nadex has its official headquarters in Chicago and was launched by the IG Group, a UK-based company that is listed in the FTSE-250. IG Group has been one of the more consistent and powerful performers of the UK stock market, with a significant presence across Europe and Asia-Pacific. The IG Group is responsible for maintaining a large number of financial companies dealing in Forex, stocks, commodities, bonds, and indices market, thereby making it one of the largest liquidity providers in the industry. IG Group is also regulated by the Financial Conduct Authority (FCA) of the UK, while its Nadex operations are regulated by the Commodities and Futures Trading Commission (CFTC) of the US.
Nadex, as a binary options exchange, has no conflict of interest with its clients. All orders are transacted between buyers and sellers, and the company offers numerous binary options contracts that only have two parties that contribute to a transaction. Nadex does not determine the price of assets, as the contracts are offered at market prices and according to the available liquidity. Therefore, binary options trading with Nadex can certainly be one of the best investment options for traders as far as security and reliability are concerned.
Nadex concentrates on keeping its binary options asset portfolio as simple as possible. There are only a few tradable assets, as the company does not directly interact with the contracts or become a counterparty to the traders’ positions. Traditionally, binary options trading is considered to be a contract between a broker and a trader, and the broker can either choose to pass on its position to other traders or absorb the orders entirely. Nadex cannot become a counterparty to its positions, primarily due to US regulation, and hence, offering a large number of assets may not be feasible for the broker. Here is a list of assets you can expect from the broker:
Forex – EUR/USD, AUD/USD, EUR/GBP, GBP/USD, USD/CAD, AUD/JPY, USD/JPY, GBP/JPY, EUR/JPY, USD/CHF
Indices – Wall Street 30 (DOW), US 500 (S&P 500), US Tech 100 (NASDAQ), US SmallCap 2000 (Russell 2000), China 50, FTSE 100, Germany 30 (DAX), Japan 225 (Nikkei)
Commodities – Gold, Silver, Copper, Crude Oil, Natural Gas, Corn, Soybeans, Bitcoins
News – Fed Funds Rate, Weekly Jobless Claims, Nonfarm Payroll
Nadex offers up to 5000 contracts daily, and traders have not reported any problems with the liquidity of the contracts. Trading the news is an excellent option, particularly when traders are looking to trade the event and not the consequence. Not every binary options broker allows you to trade the news directly, which makes it all the more alluring to trade binary options with Nadex.
Nadex Payouts & Cost Of Trading
It is recommended for traders to carefully learn about the unique concept adopted by Nadex, before investing in the markets. Nadex is not your average run-of-the-mill binary options broker that offers wither a call or put option with various binary options products in between. Nadex binary trading is not a gambling alternative, as there are actual transactions taking place in the market that make it largely similar to FX or CFD trading. Nadex offers fixed time binary options contracts to its traders, where there will be a buy side and a sell side.
Each Nadex contract is assigned a fixed value of $0 and $100, where $0 is the value for an out-of-the-money trade, while $100 is assigned to in-the-money trades. The underlying concept remains the same, as traders will make a profit or loss at the time of expiry, but the profits and losses can be controlled to a greater extent. Nadex allows its users to enter contracts in between the expiry times, and can also choose to exit the markets prematurely, provided there is sufficient liquidity in the markets to accept the order.
The payouts for profitable Nadex contracts can reach up to 150%, primarily due to the unique nature of trading, while traders can also receive refunds for losing trades if they are closed before the expiry. Therefore, the potential risk-reward ratio is lower than other binary options brokers. The higher payouts is certainly an incentive for traders to choose Nadex as their primary binary options company, but the initial investment per trade depends on the contract chosen and the liquidity available in the market.
Nadex does charge a fee for its services, and it is not entirely free from any trading costs. There is a $1 fee per contract, which is how the company is compensated for its services, and there is a maximum fee of $50 per position. Therefore, for every contract, the trader will have to pay in multiples of $1, until the trader reaches 50 contract sizes, where the fee is fixed at $50 for all positions, regardless of any increase in the contract size. We are not really bothered about the fees of trading, as it does ensure that there is absolutely no conflict of interest between the broker and the trader.
The Nadex binary options platform is designed to suit the unique products offered by the company. The interface works on any compatible web browser, and grants access to the markets through a platform that offers a guarantee of 99.9% uptime. Nadex trading platforms are slightly different from the conventional norms, as regardless of the 24 hours nature of the market, Nadex only provides market access for 23 hours a day. It does not present any significant inconvenience to the trader, but some traders may find the reduced market timings to be a slight disadvantage. However, in real market conditions, an hour of market downtime rarely makes a difference, as there are times during the market that witnesses a low amount of liquidity.
Nadex platform is an award-winning software and is developed entirely in-house. The platform is pretty advanced and has an extensive set of features that are typically absent in other binary options platforms. Traders can use the pop-out feature to create independent charts of assets and can also add multiple indicators and drawings to personalise the trading experience. If you are a serious trader, the Nadex Platform is the best interface in the market for advanced charting options, and for detailed technical analysis of an asset.
Nadex Mobile App For Smartphones & Tablets
Almost all mobile users are cared for by Nadex, as the company has a unique and well-designed app for iOS and Android platforms. The Nadex apps are one of the most advanced applications available for the smartphone and tablet market and facilitate a comprehensive coverage of the market for the best technical and fundamental analysis of an asset. The mobile apps also enable traders to customise their layout and attach tools and indicators to the charts for mobile analysis. The Nadex mobile platforms are available in the Google and Apple app stores, or traders can also use the Nadex web trader for their mobile trading needs.
Nadex Minimum Deposit
A Nadex trading account is relatively inexpensive, especially for a company that offers the safety of US regulation. Traders can utilise Nadex’s services for a minimum deposit of $250, which grants full access to the binary options products and platforms. The company has made sure that it has ensured market access for all sectors of the market, and is especially concerned about catering to both retail and institutional traders. With a $250 initial investment, traders can start trading from 0.25 contracts and trade increments can be made with 0.25 contract sizes.
Payments can be made through wire transfers and credit/debit card payments, which do provide secure means for making a deposit or withdrawal. However, traders shouldn’t expect to make payments via e-wallets or other payment processors, which is a small inconvenience for traders. Online wallets are certainly more suitable for binary options trading, and Nadex should have considered adding at least a couple of e-wallets to its payment processor.
Nadex makes sure that all traders’ funds are moved to segregated accounts and are subjected to extreme scrutiny by CFTC and other independent authorities. Nadex has a positive reputation in the industry and is by far the best binary options company for guaranteeing the safety and security of traders’ investments.
Nadex does not conform to the industry standards of providing hefty bonuses to attract clients. In fact, several regulated binary options brokers are now staying away from any bonus program, and Nadex also avoids the concept of providing a bonus to traders. The US authorities are particularly strict when it comes to trading conditions associated with bonuses, and instruct all regulated members to make sure that they do not create any adverse trading environment that may have a direct conflict of interest with their clients.
Nadex also does not have any loyalty program, which seems to be a strange policy adopted by the company. However, there is the option of a waiver on fees for trading, which is offered for a limited period. The Free Trading Days, as they are more popularly known, offer a complete waiver of fees for trading, for up to 10 days from the first deposit. A minimum deposit of $500 qualifies for two free trading days, while a subsequent increase in the initial deposits qualifies for higher free trading days. Other than the free trading days, traders can’t expect anything much from the broker in terms of bonus or promotions.
Nadex Virtual Trading
Traders can’t be faulted for wanting to test binary options trading through a demo account. Almost all major financial products such as FX and commodities trading offer a dedicated demo account for virtual. However, such an option is quite scarce among binary options brokers. Nadex, on the contrary, offers a free demo account and is representative of why Nadex continues to be one of the leading binary options brokers in the market. The demo account offers a realistic trading environment, but the actual trading volumes and liquidity may vary according to live market conditions.
Nadex Customer Support
Nadex operates within the traditional framework of how a broker is expected to function in the financial market. The customer service department can be reached by phone and email, or through a web contact form. As for customer support through live chat, the company does not seem to have any live chat widget or feature installed on its website, which prevents users from communicating with the broker instantaneously. Regardless, all customer interactions are held in a professional and responsive manner that meets the expectations set by traders on a CFTC regulated binary options company.
Nadex does not provide any trading signals, technical analysis, or any other trading materials, in a bid to avoid creating any issues with its traders. However, the broker does provide a basic training program that should help a trader to get advanced insights into the dynamics of the market. It is certainly a safe strategy by the broker to avoid interfering with their clients’ trading activities purposefully.
- An exchange house and not a broker, which ensures no conflict of interest for traders.
- Regulated by the CFTC and accepts traders from the US.
- A unique platform that offers advanced trading tools and custom indicators.
- Offers a free demo account.
- High payouts for assets.
- Trading assets are limited.
- The concept may be confusing to new traders.
- No deposits on bonus.
Does Nadex Accept Traders From The US?
Yes, Nadex is approved by the CFTC and offers trading services for US traders.
What Is The Minimum Deposit?
The minimum deposit for an account is $250.
Does Nadex Offer Mobile Apps For Trading?
Yes, there are mobile trading platforms for both iOS and Android devices.
Does Nadex Allow You To Trade The News?
Nadex offers the option of trading news events and does not hinder the ability to invest during significant economic releases.