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Nadex options review

What is Nadex binary options?

Nadex options: now binary options are legal for US residents

Nadex, North American Derivatives Exchange, is a binary options provider with its roots in the United States. It operates fully under the regulation of the US Commodity Futures Trading Commission, CFTC. Formerly, it used to be called Hedge Street. Its main business focus is the online retail exchange of binary options. Nadex options operates mostly in heavily traded stock indices, commodities and forex markets and it creates an opportunity for traders to carry out trading of spreads and limited risk binary options on such markets.

How Nadex came to be: history

Originally, it used to be known as ‘Hedge Street’. It’s based in California, San Mateo. The exchange was started in 2004 as an electronic market place that facilitated trade of financial derivatives by retail investors. After being in operation for three years up to 2007, Hedge Street closed its business towards the end of 2007. In a shortwhiloe thereafter, IG Group Holdings, a UK-based company went into a deal to purchase HedgeStreet. The deal was sealed at $6 million and restructuring of the exchange, its products and technology began shortly. HedgeStreet was then renamed in 2009 to as the Nadex- North American Derivatives Exchange.

Nadex demo



Nadex has gone to record as being the first binary options exchange to go under the watch and regulation of the Commodity Futures Trading Commission. Nadex is unique from other binary options providers in a number of ways. For instance, for the first time in the history of derivatives exchange, individuals have a chance to become members and then trade directly on Nadex with full access to an expansive trading platform characterized by order entry, position reporting, historical data services, cash accounting and market depth. The cost of becoming a member is absolutely nil, and members have the option of trading with an initial deposit of at least $250.

Contrary to the operations of most binary options providers, where the other side of member trades is taken into consideration for trading purposes, Nadex does not do that and in fact members have their funds kept in segregated accounts in reputable banks in the US. The funds are readily refundable to members should such a need arise.

Nadex, being a regulated exchange, it means that its operations in the U.S. are legal. This means that investors enjoy a layer of protection by choosing to trade with Nadex as opposed to trading with offshore binary option providers. The design of Nadex is to primarily provide retail traders with a direct platform to access contracts with a global markets orientation, without necessarily the need of a middleman such as a broker. Another source of protection to investors is that all funds contributed by members are held by major banks in U.S in segregated accounts. Segregation means that member funds are not co-mingled with other operational funds of the banks. Some of these major banks are the Fifth Third Bank and BMO Harris Bank. The overall implication of this segregation is that in the event Nadex goes bankrupt, member funds receive preference status to those of other general creditors. Member funds can never be treated as Nadex’s money under any circumstances.

Another additional level of security with Nadex is the trading rules that make our products unique, is the full collaterization of our products. This means that before acceptance of an order on the exchange, the funds must be physically present in the segregated bank account so as to establish the trader’s position.

‘Cap checks’ are also employed to ensure that the maximum possible loss is covered by the funds held. This also ensures payment of maximum possible profits.

Well, Nadex does exchange business. The fundamental question at this point is-what is an exchange? This is a central marketplace bringing together buyers and sellers with a common goal of trading. Oversight bodies set regulations that govern an exchange so that impartiality and fairness is upheld at all times. A good example of such regulatory bodies is CFTC. Another feature of an exchange is neutrality of activities. In this respect, Nadex remains neutral by not taking any positions on the markets; neither does it perform as counterparty to any transaction. This means that Nadex does not assume any speculative positions either on the exchange or elsewhere.

The Commodity Futures Trading Commission –CFTC is a wholly owned government agency whose mandate is to oversee the trading of swaps, future and options on regulated U.S. exchanges. This offers protection to the public and market users from vices such as manipulation, systemic risks, fraud and abusive practices. CFTC’s mission is backed by the Commodity Exchange Act and this helps in fostering open, financially sound and competitive markets.

Opening an account with Nadex is a three-minute exercise. It is absolutely free and the obligation to trade does not exist. The initial minimum deposit in your account is $250 after which the minimum operating amount becomes discretional.

Investors at Nadex are provided with a space to trade in inexpensive, small and capped risk derivative contracts in a broad range of markets. Nadex is a subsidiary wholly owned by IG Group Holdings plc. based in the U.K.

Nadex contracts include a spectrum of underlying markets, from spot forex rates and commodity futures to equity index futures and economic indicators. According to June 2011 statistics, the product line of Nadex included US and other contracts with an international equity index contracts with a composition of; German 30, US 500, Korea 200, US Tech 100, FTSE 250, Wall Street 30, and SmallCap 2000. Also in the report were energy contracts majorly drawn from natural gas and crude oil. Spot forex rates also featured as AUS/USD, USD/CHF, EUR/USD, GBP/USD, USD/JPY, and USD/CAD. Agricultural(soybeans, corn), metals(copper, gold, silver), and event contracts(Fed Funds, unemployment rate, European Central Bank rate announcements, initial jobless claims and nonfarm payrolls).

At this point you now understand that Nadex is a real exchange that offers you a great basket of products that you can trade on. Of important to note is that there is over the counter transaction option where somebody is available to trade against you. In the event that you make an exchange, you automatically become anonymous as a trader since you are unknown to the market maker. Ideally, the market maker has no idea whether you are buying or selling. Further, they don’t know whether you are exiting or entering the market, as they are there to simply fill in the orders. Nadex’s products offer you limited risk and therefore there will never be chances of you getting margin calls. This creates space for you to trade on other products such as metals and ags throughout international indices and other major indices.

How to register at nadex.com

Registration at Nadex.com has a number of benefits;

Binary options:

These are limited risk contracts founded on a simple market proposition of yes/no as if the markets will go up by the end of the trading cycle, usually a week. Through binary options, traders are offered an opportunity to trade the most active commodities, forex, stock indices and events whose collateral is relatively low.

How do they work?

Binary options work through a simple market question whose answer is either yes or no.

For instance;

Will the price of silver be above $1400 at 2.00pm?

If your answer is yes, then you buy the binary option. Otherwise you sell if you think No should be the answer.

The price at which you sell or buy is not the actual price of silver. It is rather a value that assumes a figure between zero to 100.

Example: silver>1400 (2.00pm) may be priced at 53.50/59.50. The first figure represents the price of selling (bid price) while the second is the price of buying (offer price).

Fluctuation of the offer/bid price occurs throughout the day; it will settle at either 100 if a yes answer was selected or zero if the answer chosen is No. The calculation of your profit/loss will be calculated on the basis of the difference of your opening price (the price you sold or bought at) and the settlement price (100 or zero).

Benefits accruing from binary options trade;

  • Short term contracts-the expirations of binaries ranges from 20 minutes to seven days.
  • Limited risk-in the event of a loss, the maximum you can lose on any single trade is your initial investment.
  • Low collateral requirements-the pricing of binary contracts ranges between 0 and $250.
  • Binary options risk and reward:
  • Let us take a look at risk and reward profile of binary options

Remember;

The floor of binary options is 0 and the ceiling is 100.

All contracts are fully collaterized

Therefore;

Collateral=maximum possible risk on trade

The collateral of the buyer=difference between 0 and buy price

The collateral of the seller=difference between 100 and sell price

The maximum reward of the buyer=difference between 100 and buy price

The maximum reward of the seller=difference between 0 and sell price

Binary options contracts;

This looks at binary options in terms of their expiration times, expiration value, settlement and strike prices.

Expiration times

The listing of binary options on a market provides multiple chances to trade with varying expiration times. The four main categories are;

Intraday- expire in the course of the trading day.

Daily- within a period of 24 hours of listing.

Weekly-last to the end of the last day of the current trading week.

Event-based;-expire at a specified future date and time.

Expiration value:

An expiration value is obtained when a contract expires. The rationale upon which this is determined depends with the specified underlying market. The process involves the following;

Indices and commodities;

The last 25 trade prices are taken from the underlying market

The highest and lowest 5 prices are taken

There now remains 15 prices. Now take their arithmetic average. The average is then rounded to one decimal point beyond the point of accuracy of the underlying market.

Forex;

Identify and select the last 10 midpoint prices drawn from the underlying market.

Take away the highest and the lowest 3 prices respectively.

There are now 4 remaining prices. Compute their arithmetic mean and then round to one decimal point beyond the accuracy point of the underlying market.

Reuters is the source of data from which the market prices used to compute the expiration values for commodities and indices contracts are obtained from. Should Reuters not be available, impeccable data can still be obtained through Bloomberg or other appropriate data providers depending with the prevailing circumstances.

For forex contracts, the data related to market prices used in the computation of expiration values is obtained via NadexFX, which is a proprietary data feed. Its composition includes quotes from 12 highly reputed banking institutions. Should NadexFX be unavailable, similar market pricing information may be obtained through Bloomberg or any other data provider for as long as it is fit to the circumstances at hand.

The expiration values for contracts related to economic events are provided by the designated reporting body.

Settlement;

Since binary options are cash settled contracts, it means that if left to expiration, they will settle with an all-or-nothing payout.

Two scenarios are possible:

If the contract’s condition is achieved, then the settlement is at 100

On the other hand, the settlement value is 0 should be contract’s condition fail to be achieved.

Note that closing a contract before expiration can lead to attainment of profits or cutting of losses.

Strike prices;

For a binary option, the strike price is the level at which the option is settled against the underlying market. For example, for Gold>$780 at 10.50am contract, then $780 is the strike price. Nadex lists a range of strike prices against each level of expiration time. For instance, Nadex provides a list of 23 different strike prices for the various categories of expiration of gold.

NADEX SILVER>$1400 (2.00pm)

YES 100

…………………………………. $1400

NO 0

Another Example of binary options;

Assume you choose US Tech 200> 1560(4 AM)

Complete the ticket by buying if you are convinced that the index will be above 1560 at 4 am.

Assuming the offer price at that time is 34.00, and you decide to select 15 contracts each at $1.

Your maximum potential loss and profit are automatically displayed.

Depending with the Nadex’s com automatically computed expiration value at 4 am, your binary option settles at:

100 if the index future value is above 1560

0 if the value is below or at 1560

Profit; occurs if the expiration value for US Tech 200 as calculated by Nadex at 4 am is above 1560. In this scenario, your trade is settled at 100.

The difference between the offer price of 34 and the settlement price is 66.

Profit= the difference (66)*worth of contract per point ($1)*number of contracts (15)

66*15*$1=$990

Loss: occurs if the expiration value for US Tech 200 as computed by Nadex at 4 am is equal to or less than 1560. At this point your trade settles at 0.

The difference between your selected opening price (34) and the price at which the trade is settled is 34.

Loss=the difference (34)*worth of contract per unit ($1)*number of contracts.

34*15*$1=$510

Legality of binary options for US residents

Open an account for free with Nadex

The biggest question in everyone’s mind is whether binary options are legal for US residents. It is true that there is much confusion today regarding the legality of trading binary options in the US. The main cause of this confusion is the mushrooming of off-shore binary options platforms and the OTC contracts/off-shore exchange offered by such platforms.

In regards to this legality issue, the biggest question for now should not focus so much on whether binary options in the US are legal, but rather the focus should be on whether they are listed on a proper, major and trusted United States Exchange and whether Nadex is offering the options properly in accordance with any laid down regulations.

To shed light on this melee, I would say that Nadex has the legal permission to welcome US residents as members. Further, Nadex is a dully regulated US exchange under the watch of the Commodity Futures Trading Commission- CFTC. Are you a US resident trading with an offshore broker on binary options? It is time you question your broker they adhere to any regulatory principles. If not, then Nadex broker is ready to take you as a member because the Nadex operations are based on regulatory principles that are aimed at protecting traders and safeguarding their funds.

Nadex is registered with CFTC as a Derivatives Clearing Organization (DCO), simply known as Clearing House and also as a Designated Contract Market (DCM), what is commonly referred to as an Exchange.

In pursuant to its registration requirements, one of the key functions of Nadex is to match sellers and buyers of a contract in an impartial and unbiased manner. As opposed to other online platforms, Nadex emphasizes on full disclosure of exchange fees without benefiting from losses or gains on a trade.

Nadex also provides a transparent environment that creates ample space for the settlement of accounts besides sales and time data.

Is it possible for US residents to trade with offshore brokers?

The answer to this question resounds ‘No’. the answer is drawn from the response of the director of Enforcement for the CFTC while ruling out a recently filed lawsuit; in a simple paraphrase of the ruling, it is not within the confines of the law to persuade US persons to sell or buy commodity options if such contracts are neither listed for trading nor trade on a CFTC- registered broker.

Nadex-is it a legitimate platform for trading binary options?

This is question going through the minds of many. It is time we take the bulls by the horns and get clarification about this issue.

The answer is a big Yes. Nadex is actually the only binary option exchange operating in a regulated market. All other binary options exchanges operate in unregulated, foreign countries making it more of a gambling exercise than trading with Nadex. With Nadex, there is always that option of closing the contract before it reaches expiration. This means that you neither win nor lose.

How do you place a binary option trade?

Trading binary options on the Nadex platform has been simplified and made as straightforward as possible. The following steps can be a god guide into the process:

The very first important thing to remember as part of preliminary preparedness is to have an understanding of how binary options work.

The second preliminary thing is to have an account with Nadex.

Open an account for free with Nadex

You can now get started

Log in to the trading platform. You can actually do this from anywhere on the site.

There is a blue icon at the top right corner on your screen. It is written ‘Log In’. Click it.

You will then be provided with empty boxes for you to enter your username and password. Fill them appropriately.

Then click Log In for the trading platform to load your account details.

The next step is finding your market. To the left side of your screen you will the Finder panel. Use this panel to proceed to the Navigate window that contains a list of markets available to trade.

For easier identification of a market you can; make use of the ‘search’ box, use the dropdowns to navigate or search via the pre-defined ‘watch lists’.

The next thing is having a look at the available binary options and choosing market. To do this:

Use the dropdown arrow in Finder to proceed to the Forex Binary Options available.

Make plain the contract categories by selecting EUR/USD.

To see a display of the available range of daily contracts, select ‘daily’.

Complete your ticket now.

Let us assume that you choose EUR/USD>1.7850(4PM).

There are two options on the order ticket
Buy; this option is possible under the condition that at 4pm, EUR/USD will go above 1.7850.

Sell; take this action if you think that at 4pm, EUR/USD will either be at or below 1.7850.

If your thinking is that the euro will rally against the dollar, then choose ‘Buy’ option in the ‘Direction’ field. In the ‘Size’ field select ‘2’ contracts.

Use the arrow buttons in the ‘price’ field to fill the current price offer. Alternatively, you can type it manually. The other option to enter the current price is by clicking on the appropriate price shaded in yellow.

Let’s assume you choose 47.00 as the offer price.

The figures for your maximum potential profit and loss populates; let’s take $104 and $92 respectively.

To proceed you then click ‘place order’.

Your position opens.

At this point, you are at an open position and faced with two options.

What next?

Closing your binary position.

The first option is to allow the Binary Option expire at 4pm, settling at either 100 or zero.

Option two is to close your position earlier than 4pm, and by s doing take a profit or cut a loss.

Closing the position before expiration;

Click the name of your market in the ‘open positions’ window. An order ticket will be displayed.

The order ticket displays an opposite trade to yours. In effect, this will close your position.

In order to close your position without changing the current ‘Bid’ price, click ‘place order’.

Assume that in this example the bid price is 68.50. This is 21.50 more than your opening price of 47. This multiplied by your ‘2’ contracts results to a gross profit of $43.

Partial closing of positions is also possible by altering the number of contracts in the ‘size’ field.

Steps of opening a Nadex account in summary: www.nadex.com

Click on create account

Follow five simple steps to complete the creation

Step one; enter your personal details

Step 2; employment details

Step 3; completion of a regulatory questionnaire

Step 4; selection of the personal details of your account

Step 5; reading and agreeing to terms and conditions

Then? Get started.

Please note the steps are very simple to complete because everything is given for you, you simply select your answers from the answer options provided.

Nadex Trading Platform Tour

Open an account for free with Nadex

Our trading platform is browser based and this makes Nadex exchange fast, reliable and flexible.

Real time charts

You are able to see the price movements related to Nadex contacts in a real time basis through our charts. You will still be able to get more insights and indications of the prevailing market price related to a particular asset. Through the charts you can view tick by tick sources of information as well as apply technical indicators. It is important to note that chart data is only indicative data and therefore you should anticipate fluctuations from the real expiration value.

Direct market access

Direct market access is guaranteed by our online trading platform. This means that you are able to see the offer and bid price together with the number of contracts available. Therefore, you can trade into the exchange directly. You are always at liberty to enter and leave positions at any given level of your interest simply by placing orders to open.

Full customization

Our exchange trading platform is entirely packed with features. However, this does not mean that the platform remains that rigid. It is possible to tailor make it to suit your preference so that you can be able to view functions and data that you need. This enables you to monitor your markets of interest with our watch lists.

Easy access

There is no hustle while trading on the Nadex exchange browser based platform. You can trade from your own comfort wherever you are. You do not have to download anything. All what you need is to log in using your username and password.

No platform fees

Using our trading platform is absolutely free with no data fees. Therefore, feel free to access our exchange platform anytime, from where you are at no charge. A transaction cost of each trade is the only fees that you ever pay on Nadex.

Streaming data

The moment you are logged onto the Nadex exchange platform, you actually start streaming real time data directly from the exchange. Any data you tick is accurate data. There are no chances of delayed prices. Does the real time access cost anything? No, it is free of charge.

Reliable technology

In terms of exchange match engine we are very effective and efficient, with 2011 statistics indicating that we are at 99.9%. There is no need to worry about the safety of your details that you use while trading on through the platform. Why? This is because your details are absolutely secure by the virtue of having access to our website trading platform fully encrypted.

Platform testing

Just for you to affirm your confidence on our trading platform, we give an opportunity to do a test drive on the platform by opening a demo account free of charge. The demo account will also help you do some practice on how to trade spreads and binary options using virtual funds. In as much as this is your right, you are not under any obligation to do it.

Nadex trading platform is also available on tablets; this is possible with the Nadex ipad app that offers intuitive and unique ways to bull spreads and trade binary options on various financial markets with global popularity.

Nadex mobile trading; this is yet another free Nadex app that offers you flexible, fast and secure access to bull spreads and binary options anywhere, anytime on the Nadex exchange platform.

Open an account for free with Nadex

Some of the Nadex binary options strategies:

One of the common characteristic of a tool in the right hand is that it is very powerful, and so are Nadex binary options. These options are very different from several binary options being offered in the market today. This difference is evident through the versatile kind of trade offered by Nadex binary options.

Below is an overview of some of the best strategies that go well with Nadex

Trend following strategies

Nadex options being binary, applying trend following strategies on them has proved to be extremely effective. Trend following strategies make use of the particular movements of the market to secure trade. Use of technical indicators is very key- for instance trend lines, stochastic oscillators, RSI, moving averages and MACD. All these indicators assist in pinpointing key entries in the market. This theory is geared towards eliminating false signals as the information gathered is based on facts. Only signals that are in line with the prevailing trends are taken into consideration.

Some trends following signals are weak and others strong. Therefore, recognizing the difference is very crucial. One such ways of identifying the difference is through observation; from experience, a stronger signal is always preceded by weak signals. However, stronger signals do not always follow a weak one.

Nadex hedging strategies

These strategies aim at reaping benefits from the movements of the underlying price of assets, knee-jerk reactions and trading ranges only in the short term. Since it is possible to sell and buy Nadex options it follows therefore that you can be at dual positions that tend to offset each other and. In addition, you can do trade in a way that leads to a profit in both situations. The fundamental concept is to enter into a long position, and then give it time to go up and gain some value after which you sell and offset the other.

Nadex credit strategies

Nadex binary options have a unique feature because when you sell them to open, you get a credit. What this means is that you receive your payment upfront as opposed to waiting for the expiration of the options. This feature of binary options can be applied to all other strategies whether in a down trend or in an uptrend. In a down trend the most appropriate strategy is trend following credit strategy because you will be able to sell position at their entry signal instead of buying them. This is a perfect example of a bearish strategy and its main advantage is that it tends to move into the money a bit faster as compared to bullish strategies. In an uptrend credit strategy will also work very well. A bullish movement is usually followed by a consolidation or a pullback.it is at this point when you can advantage of the positions that are out of money and sell them.

30 minute binary options strategy

While using this strategy the key focus is maximizing profitability by making calculated utilization of expiration times. It is actually a hybrid strategy because it combines the other three strategies discussed above.it works best for forex pairs, indices, stocks and commodities. The best way to use this strategy is to begin with observation of trends on the daily charts, then advance to the hourly charts. This will give you some good insights and guidance when choosing your market position. Starting with the trend gives you a glimpse about the underlying conditions in the market. Draw trend lines while using data from the daily charts.

Binary option basics

These are the factors affecting binary options in one way or the other.

Intrinsic value- this is taken as the difference between the strike price and the underlying market prices. How far is the underlying market over the strike?

Volatility-an increase in volatility causes the binary price to move towards the midpoint mark of the 100 point range. At point 50, the market is viewed as undecided of outcome.as volatility decreases; there is a gravitation of binary price towards the wings, either 100 or 0. At the wings, the outcome of the market view is perceived to be more predictable.

Time-Nadex binary options are characterized by their short term expirations usually hourly, daily or weekly. Therefore cost and time premiums are kept relatively cheap.

Welcome to Nadex exchange

Welcome to Nadex exchange where you can benefit from an exciting experience, a world full of opportunities. The binary options at Nadex are unparalled to anything that you have seen. Nadex is indeed a world of opportunities because of the continuity of the commodities at short cycles of an hour, a day, and a week. All market conditions are taken care of. When markets are slow, Nadex exchange turns such into huge opportunities.

This is how Nadex exchange works let’s say that EUR/USD is trading at 1.2520 and is expected to move higher in the next few hours. After considering the wide range of spikes and expirations you choose the contract that best fits your strategy. If the market works in your favor you can profit early or wait until expiration. If the market moves against you can count your losses early or wait until expiration knowing your maximum potential loss is already determined.

Start trading today at Nadex, the binary options exchange where you can benefit from insight and experience across a wide variety of markets. Choose your potential reward, cap your risk. No brokers no middlemen.

Introduction to Nadex continued:

Welcome to a world where members have privileges;

Unlike Nadex where you only require depositing $100 to begin trading, stocks need you to have a balance of not less than $25,000 to trade just in a day.

The market maker together with other traders exists to offer liquidity to the markets.

No commissions are charged to members by Nadex.

Nadex, like other exchanges makes its revenue mainly through exchange fees.

The range of Nadex exchange fees is .25 to .90 for every contract and the exact figure within this range is determined by the size of the order filled.

Nadex is actually so cheap almost free when compared to other exchanges. For instance, the exchanged fee by CME is $1.14 for every contract order.

Nadex offers discounted exchange fees as the number of contracts ordered increases. The table below was drawn from results published by Apex Investing Institute LLC in 2012.

Contracts
Fees for every contract per side(in dollars)
1-10
9.00
11-20
0.60 plus discount 30%
21-50
0.40 plus discount 50% for contracts above 50
51-above
0.2 and 70% discount for contracts above 51

Nadex does not charge exchange fees for contracts that expire Out of The Money.

No data fees

Nadex binaries and spreads can be used to:

Place trades and reap benefits of:

Flat markets

Oscillating markets related to swing trading

Trending markets whether down or up markets

Volatile markets that are characterized by defined risk and wild swings

Open an account for free with Nadex

At Nadex, you are assured of 100% defined limited risk. All Nadex products have their risk capped, unlike other forex and risk futures which are uncapped.

The maximum risk on Nadex is actually the margin, or in other words the money you must deposit for you to place trade.

At Nadex, whipsaw risk does not exist. Whipsaw is the time the market spikes move against you, hitting hard on your stop loss, leaving you knocked out of a trade and then going back immediately n the original direction you began trading with.

Any Nadex product you trade in gives you until expiration. This increases your chances of being right. Thus, not at any given time will you be whipsawed out before the expiry of a trade.

With Nadex you can never suffer any greater loss than what you place to begin trade. Again you can never lose that which is not in your account, as it happens with mutual funds, stocks, forex and futures. In other words, no margin calls risk at Nadex.

No margin adjustments. What this means is that:

When the markets get highly volatile with regards to the futures markets, it is not possible to increase the margin rates in the course of day before closure of the trade. Such changes of margins do not happen at Nadex. Remember that your margin is your risk and therefore adjusting the margins means adjusting the risks voluntarily, something that has no justification.

No exercise risk.

As opposed to call and put options, with Nadex products there is no concern with a stock, forex or future being put to you or called away from you.

The delivery risk of take or make does not exist; this is delivery of products such as barrels of oil, bushels of corn and bars of Gold among others which feature in the composition of most underlying products in futures markets.

Multiple trading opportunities exist at Nadex;

With Nadex you trade throughout the week from Monday to Friday. This is contrary to options where trading opportunities are limited to specific times either monthly or even weekly.

With Nadex you can trade a variety of products all from one account:

US indices

Commodities such as energies, metals and agricultural

International indices

Forex

Nader Customer service

Nadex has always endeavored to offer her customers quality service via email, fax, call backs and phone calls. Every question you have for Nadex is dealt with individually and comprehensively. Therefore, any issues you have for Nadex feel free to contact the customer care and they will be addressed far beyond your expectations. Nadex opens for trading throughout the week from Monday to Friday from 6.00pm ET to 4:15pm ET. THE ONLY EXCLUDED HOURS ARE THE DSAY END PROCESING HOURS WHICH OCCUR between 5pm and 6 pm. During most of US holidays, the exchange remains closed.

If your trade wins, the rate of return is up to 75%. On the other hand, when your trade losses, no return.

Languages, deposit options and bonuses

Before the start of trade, you are required to make a deposit in your account. There are a number of options available on nadex.com to facilitate the depositing; some include electronic cheque, wire transfer and ACH.

English is the language available for Nadex traders to do their transactions.

Additional features;

The Nadex website is actually one its best in terms of qualities. You will find additional features on the website, such as daily bulletin, rules, results tab, notices, fees tab, hours and holidays. All these features can be accessed from the bottom side of the homepage- these are just not features for traders but great tools.

There are guidelines on how to trade binary options, forex binary options, Gold binary contracts and binary contracts under the binary options tab.

You can change layouts to your preference and taste on the binary options platform. You have an option to save the layouts you select so that they will be available to you next time you log in.

The management of your account is solely your responsibility. You will be able to review your trading. The website is not only user friendly but also quite informative.

Assets and expiry times

On average there are about 21commodities and stocks forex that can be traded on Nadex. This is quite a large number given that you are trading on an exchange operating in a regulated market. The expiry times of these commodities fall under the categories of hourly, intraday, daily and weekly.

The main reason for having some features like notices section is because Nadex environment is quite dynamic and the communication of changes to traders becomes very necessary. It is important to note that the trading platform at Nadex is mostly suitable to experienced traders over beginners. Experienced and advanced traders in binary options choose Nadex platform because of the high fees charges and high collateral on other platforms.

The bottom line

The proposition upon which binary options are founded is ‘yes’ or ‘no’ proposition.it is your buy or sell price that determines your loss and profit potential. Whether the worth of the option will be $100 or $0 at expiry, it all depends with your trading skills. Both risk and reward are capped therefore creating a room for one to exit the option at their own time before expiry to reduce a loss or lock in a profit. Some foreign companies are conspiring to persuade US residents to accept to trade their binary options. These companies operate illegally and trade in illegal products making the traders risk even greater.

The barriers to entry in binary options are extremely low. However, this does not mean the same simplicity to entry will be transferred to making money. Getting in easy does not necessarily mean what to be done inside is easy. On the other side, there is always another person who sees you as being on the wrong side while he/she is the one on the right track. It is prudent therefore to trade with capital that you can accept to lose resiliently.

Directional trading strategy for volatility

In a scenario where volatility is expected to increase or the underlying market is expected to move big, then the most appropriate binaries to use are the out-of-the –money. This is because the underlying market is operating at a lower trade than the contract or the strike.

Where the underlying market conditions are to be flat or where the volatility is decreasing, then you might be interested in At The Money or In The Money binaries.

Nadex Strategies

Long volatility spread strategies

This involves combination of long volatility binary strategies so as to gain more flexibility with market movement. One way of capitalizing on explosive strides of the underlying market is by selling low strike binaries (In-The-money) and buying high strike binaries (On-The-money). Working on the understanding that Nadex trades are fully collaterized, it means that the sell leg of the spread will be treated as a debit and consequently the total initial cost increases. The overall effect of this chain is a higher breakeven.

At the time of expiry, there can only be one leg in the money (this does not rule out the possibility of having both legs worthless at expiration). Basically, the aim of a rationale trader is to have the market move in either direction provided the initial cost is covered. The basic concept behind this strategy is the locking in the profit resulting from the one profitable leg and at the same time keeps the other leg freely hoping in the market to facilitate the unforeseen market reversals.

Short volatility spread strategies

Under this strategy, traders make maximum use of flat stagnated underlying markets by selling high strike binaries and buying low strike binaries. This allows the traders increased flexibility to take advantage of the market direction.

Just like the long volatility spread, the sell leg of the spread in short volatility becomes a debit. This results to a rise in the initial cost.

With the short volatility spread strategy, either one leg can finish in the money at expiration or better still they booth finish in the money. The use of this strategy attracts a higher initial cost with a much higher probability of payment of capital upfront.

The narrower the rift between buying the low strike price and selling the high strike price, the less the cost and the lower the probability for a successful trade. It is extremely impossible to predict whether the underlying market will finish in closer and tighter range.

On the other hand, if the rift is wide then the cost goes up and the chances that the trade will be successful also increase. This scenario of having the underlying market close in a wider range is easier to predict with some good level of precision and accuracy.

Statistics drawn from the New York Stock exchange reveals that there has been an upsurge I the use of 20-minute options. These are option contracts whose expiration period is 20 minutes. They have gained a lot of popularity to even become in the second position of derivatives trading on Nadex platform after the hourly contracts. The main reason for this trend is because investors are interested in nothing else but faster gratification. These 20-minute contracts were in a fanfare event by Nadex.

Today, 15% of the entire volume on Nadex is accounted for by the twenty-minute options. These highly short-term derivatives are available in Nasdaq 100 index futures, S&P 500, Dow Jones Industrial Average futures as well as Russell 2000.

Tim McDermott, Nadex CEO praised the 20-minute contracts as a form of trade that offers tremendous opportunities.

It might be important to note the difference between vanilla options and binary options; vanilla options have two outcomes only-either nothing or a fixed amount.

Generally, the binary options market is exponentially growing as compared to the other options market. in 2014, Nadex had traded 3 million contracts, a figure that exceeds the total trade volume done in the entire of 2013 by 2.3 million. In overall terms, a growth of 5% was recorded in 2014 according to results released by Options Clearing Corp.

Binary options have become more commonplace in Europe and the United Kingdom. In the United States, the largest number of binary options is traded on internet platforms without regulatory oversight. Commodity Futures Trading Commission, CFTC has keenly noted that some of the sites purporting to be trading binary options are actually organized scams out to defraud investors. Owing to this, CFTC in conjunction with the Securities and Exchange Commission have given investors a warning about some of those fraudulent sites.

Amidst the existence of such fraudulent sites, there is one platform that is regulated by the CFTC, and this is non-other than the Chicago-based Nadex. Are you an investor? Are you looking for a binary options provider that you can feel secure about? Then Nadex has all what you need for you to realize your investment goals.

Are you ready to start trading? Do not be left out as traders reap tremendous benefits on Nadex. Fold your sleeves and begin the journey of realizing your investment potential because Nadex exists to help you realize that untapped potential. your investment just got better with Nadex.

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