Nadex – North American Derivatives Exchange, is the largest U.S. based regulated exchange for short-term trading and limited risk; there are options for low-cost binary trading too. Nadex exchange is currently the only exchange available to United States citizens, all the funds deposited here are secured in top U.S. banks, not in any offshore brokers, like the case with some international entities.
Nadex is not just an ordinary exchange, providing powerful advanced features and trading tools for traders of all experience levels, rather a CFTC-regulated exchange.
Nadex allows three different options to trade in – touch brackets, binary options, and call spreads, based on commodities, forex, and stock indices.
Unlike unregulated offshore exchanges, Nadex offers a transparent yet legal way to trade-in binaries, offering a stable and reliable platform that at present deals with 5,000+ contracts on a daily basis.
With Nadex, you can trade directly from your PDA (phone, tablet, or computer). Opening up a free account and a low minimum deposit is what makes Nadex ideal for beginner and novice traders.
There must be queries like how legitimate Nedex is for trading binary options? How is Nadex winning competitions or is it a scam?
This Nadex review has everything, from signing-up to offerings, pricing, trading options and platforms, and everything that helps individuals to decide whether to buy shares from Nadex or not.
So, before looking at its potential trading returns, let’s understand how Nadex has evolved into one of the largest leading exchanges.
|Headquarter||Chicago, United States|
|Deposits and Withdrawals||Check, Wire Transfer, Debit Card, & ACH Bank Transfer|
|Asset Types||Stocks, Indices, Forex, Cryptocurrency,& Commodities|
|Assets in numbers||29|
|Available Platforms||Web, Mobile, & Demo|
|Commissions and Fees||$1/Contract, Capped at $50|
- Nadex – A Brief History
- Is Nadex safe?
- Successful Trading with Nadex
- Registration and authorization for Nadex
- Nadex Login and sign in
- Nadex account Verification
- Demo account
- Nadex Deposit and Commission
- Trading Strategies with Nadex
- Binary Options
- Call Spreads
- Touch Brackets
- How to withdraw money from Nadex
- Nadex Training Tutorials and Solutions
- How to Contact Nadex?
- Final Remarks
Nadex – A Brief History
The exchange, originally known as ‘HedgeStreet,’ was launched back in 2004. The initial objective was to create an electronic marketplace to facilitate retail investors – to trade in financial derivatives.
However, by 2007 HedgeStreet closed.
Then in 2009, a UK-based IG Group Holdings Plc. purchased the company and HedgeStreet was re-branded as Nadex, using sophisticated technology and instruments.
It’s worth noting that being in London, the parent company is listed on the FTSE 250, while Nadex is headquartered in Chicago, Illinois.
Is Nadex safe?
Being a US-based financial exchange located in Chicago, Nadex is respectively regulated by the Commodity Futures Trading Commission (CFTC).
Nadex is operated under the legal supervision of the US authorities coupled with the fact that it is a part of a reputable and globally-regulated IG Holding group that brings trust to the company and the business models being offered.
We always recommend regulated brokers for trading, Nadex operations follow all the international safety measures, and for client protection, there are numerous obligations too. Nadex ensures execution of all trades according to the US laws, and the environment is fully collateralized without leveraging risk, such as debt risks or margin calls.
Successful Trading with Nadex
Nadex is accessible from users from over 41 countries worldwide, offering only one type of account for all the traders whether the trader is a US citizen or an international trader, corporate firm, or an individual.
You can open up a Nadex account with a deposit of $250, it’s worth mentioning that the deposit is higher than the industry average; so if you are not willing to or afraid to commit a huge amount at the start, then Nadex is preferable.
Nadex let’s you test the platform before signing up by offering a demo account with $10,000 virtual funds; you can keep the demo account even after signing up with the live account.
Reiterating, Nadex offers three different products: binary options, touch brackets, and call spreads, for short-term contracts and built-in risk management systems.
Registration and authorization for Nadex
Nadex Login and sign in
To open a Nadex account online, you will need to provide your:
- Permanent residential address
- Date of birth
- Social Security Number (maybe any other visa information)
Nadex account Verification
With your application, Nadex also asked to upload documents to verify the given information (name, date of birth and address.)
As you log-in to the Nadex Trader platform, the secure Upload Document dialog will appear.
In a few cases, they may ask you to upload images of some other legal documents.
And, to open up a business account, you will be asked to provide all the documentation that verifies the status and ownership of your entity and it is authorization and engagement in the type of trading option being offered by Nadex.
All Entity Accounts need to submit…
- Nadex Entity Membership Agreement
- W-9 Form
- Unanimous Consent Resolution
- Valid government-issued ID – for all the signatories of the application
If you own a trust, LLC/partnership, or any corporation, you will need to submit additional documents based on the type of entity.
Other than the web and mobile platforms, Nadex offers a demo platform that is ideal for learning the basics of binary options – it offers trading without losing real funds.
The Nadex demo account gives each user $10,000 in virtual capital that can be allocated as if it were a real account.
The demo platform allows traders to:
- Learn to use the Nadex interface
- Understand the fluctuations in the market
- Learn to measure risk parameters
- Test trading in real-time
Continuously using the Nadex demo account even after having a real account lets traders to continually test trade strategies before trying them with real capital.
Nadex Deposit and Commission
Nadex is an exchange, not a brokerage; orders placed at Nadex are submitted directly to the exchange without an intermediary. So, there is no need for brokerage or commissions.
Nadex charges a fixed fee of $1/transaction, with a cap of $50 for every single purchase; fee is the only source of revenue of Nadex as there is no trade within their traders. If binary options expire, Nadex waives the settlement fee.
Other than the transaction fee, Nadex only charges a $25 fee for the returned deposit. To encourage trading, the platform also runs regular promotions like free trading days.
One of the limitations of Nadex is the number of assets available to trade on its platform, but having a product like binary options is good enough to offset this disadvantage.
Once you open an account with Nadex, you may want to deposit funds to begin trading. There might be different treatment for different clients – US or International clients, because of the different regulatory restrictions, so check conditions with support service.
If you are a US citizen, you can open an account using ACH, debit card, wire transfer, or a paper check, and for non-US users, a debit card or an international bank transfer is needed. Once the account is funded, you can start trading.
Since you are not allowed to invest more than the funds available in your account, the losses are also limited to the amount present in the account.
Trading Strategies with Nadex
Let’s briefly discuss all three financial services offered by Nadex!
Binary options are one of the most exotic, and at the core of the Nadex exchange, the risk associated is the most noticeable feature here. The exchange offers a fixed or no payoff at all once reached expiration; if a binary option expires, the value of the asset will fall to its strike price. Either the trader receives nothing or, receives a fixed price. For the US, this fixed price is always $100.
The Binary options are based on three factors:
- The asset – The assets can be of any tradable industries, must be hosted on Nadex. These range from stock indices to Forex, commodities and even Bitcoin.
- The expiry date – The asset could be of zero value or worth $100 upon reaching the expiration date.
- The price – This is the deciding level – whether an option is “out of the money” or “in the money.” For a payout, sellers want it out and buyers want it in.
Make sure that the Binary options have a fixed risk. It means traders won’t lose more than they initially invested, and Nadex does not issue margin calls as the trades are funded from the beginning.
In the Nadex exchange, a call spread is a unique way in which some trades have a discrete ceiling and floor.
Trading in vanilla options, there’s unlimited potential for loss and gain, but predicting market trends is near to impossible – so get ready for a dramatic drop or increase with this option.
Call spreads generally remove the potential for traders striking in a single trade, while ensuring a limit on losses. To implement this, Nadex sets hard limits on how high or low a market can fluctuate.
So, if a value surpasses a limit, it will be held at either the ceiling or floor, whatever in question, no more, no less.
Touch Brackets is unique to Nadex, allowing traders to make calls based on price action and always bet while following the direction/s of an entire market.
Touch Brackets last only a week. At the beginning of a week, Nadex sets four brackets for a market, each with a different price ceiling and floor, and tracks a measurement called the Nadex Underlying Indicative Index.
As the Index number “touches” the price – either ceiling or floor, traders earn a profit or loss. And, in case of limited or no market fluctuations in a week to register a touch, then the Brackets expire.
This new method provides a macroscopic view of the given market rather than individual assets, allowing traders to focus on the larger picture.
All three trades are available in different types of trading options, such as:
- Indices: US 500, US Tech 100, US SmallCap 2000, Wall Street 30, FTSE 100, Japan 225, Germany 30, and China 50
- Commodities: Gold, Silver, Copper, Crude Oil, Soybeans, Corn, and Natural Gas.
- Forex: EUR/USD, GBP/USD, USD/CHF, USD/JPY, AUD/USD, USD/CAD, AUD/JPY, EUR/GBP, GBP/JPY, EUR/JPY.
How to withdraw money from Nadex
To withdraw funds from Nadex, you may choose Bank Wire transfer or ACH, regardless of whether you are a US citizen or an international client. Nadex will not charge any fees for an ACH withdrawal, however, Bank wire will charge a processing fee of $25.
Nadex confirms the withdrawal in 3-5 business days, after which your funds will be returned to your bank account.
Nadex Training Tutorials and Solutions
Nadex is one of the few binary options exchanges that are providing their traders with qualitative trading training and education.
To help with binary options, Nadex has an extensive library of learning resources, most of them are free, even there are higher-level webinars too but only for members.
There is a wide variety of resources such as handbooks, trade examples and tutorials, live/recorded webinars, informational videos, e-books, and some free online courses.
However, Nadex has also reserved some resources that are only for those who are registered with Nadex. Apart from handbooks and webinars, other resources include:
Other than these, there is also an FAQ section – to answer some commonly asked questions.
How to Contact Nadex?
Nadex trading hours are from 3:00 PM EST Sunday to 5:00 PM EST Friday, that can be contacted via a US toll-free number, email, or an international number. Unfortunately, there is no live chat option to reach Nadex customer service.
Nadex has a good playing field for traders around the globe, especially those who are interested in binary options. Its web platform is simple and intuitive to do what it is supposed to do. No native mobile apps are available.
So, for a high-risk high-reward sort of trading, Nadex is the best platform.