1 Minute Review
NADEX, or the North American Derivative Exchange, offers retail trading of binary options, Touch Brackets™ and call spreads on commodities, forex and stock indices from a single account and single trading platform. The firm is owned by the U.K.-based IG Group, a FTSE 250 global financial services firm.
- Binary options trading
- Advanced trading and charting tools
- Low fee structure
- Easy-to-use interface
- Availability of great educational resources to educate investors
- Access to advanced technical analysis, tools and charts
- Option to exit a trade before expiry to preserve profits on the "in-the-money" or cut losses when "out-of-the-money"
- Free to deposit; only fees are for wire transfers for withdrawals
- Limited choice of asset classes, with stock trading not allowed through the exchange
Who Uses Nadex?
For anyone on the lookout for trading binary options, very few regulated options are available, and Nadex is one of the few available for the following individuals:
- Binary options traders
- Seasoned investors
Binary Options Traders
Those investors who look for a simple way of making money out of the price fluctuations may be taken for a ride by scammer exchanges/brokers in the name of offering a way to trade binary options. The risk element is minimized if one uses Nadex, given that it is a regulated exchange.
Beginners Use Nadex
The educational resources available with Nadex makes it appealing to beginners, who can gainfully use those to get fairly acquainted with binary options as well as Nadex and its trading platform.
Seasoned Investors Also Use Nadex
Seasoned investors will find an able ally in Nadex’s advanced trading tools and charting application, which could help predict the directional moves in the markets.
Nadex’s Commissions and Fees
An account can be opened for free online. Opening minimum balance is $250. The firm also offers market data and trading software, including advanced, charting and analysis tools free of cost. The fee charged is $1 per contract side irrespective of the number of contracts in the order, and for exit another dollar. However, if the binary option expires at zero, the $1 settlement fee is waived.
Nadex’s Platform and Tools
Nadex’s web-based platform runs on any PC with a modern browser and fast internet connection.
The firm’s proprietary mobile trading apps are designed for the unique features of touch screens and offer secure, flexible ways to trade on the go. You can trade on Windows, Mac, or Linux.
The firm also has a demo-trading platform, which is a full-featured virtual account to test drive the Nadex trading platform.
Nadex’s Research and Tools
The firm’s web page has a section dedicated to learning, called Learning Center. The segment has basic educational courses, delving into Nadex, Binary Options, Nadex’s Trading Strategies and Nadex Spreads.
Under the Resources heading, the firm offers webinars, videos, trade examples and e-books. Market-related news and analysis are provided under the head “Market News.” The firm also displays a glossary of terms related to trading.
Nadex’s Customer Support
Nadex clients can reach support anytime from 11 a.m. ET Sunday through 5 p.m. ET Friday. The toll-free meant number for U.S. clients is 1-877-776-2339, while international clients can contact Nadex using the number +1 312-884-0100.
Customers can also e-mail Nadex at firstname.lastname@example.org.
Meanwhile, prospective U.S. customers looking to open an account can call a Nadex Accounts Specialist between 7 a.m. ET and 8 pm ET from Monday through Friday and 7 a.m. ET and 4:15 p.m. ET on Fridays using the toll-free number 1-866-296-0167. The corresponding number for prospective international customers is +1 312-884-0162.
Note: Customer service is available only in English at this point in time.
Nadex’s Ease of Use
On opening an account online, free of cost, you can fund your account using a debit card.
To open an account, you have to fill out an online application, which can be done in five minutes. You can fund your account and begin trading once the application is approved.
The account types allowed by the firm include:
- Individual accounts for U.S. residents
- Individual accounts for international clients (click on “eligible countries”)
- Business accounts (trust, partnerships, LLCs, corporations)
- Permanent demo accounts: The firm provides $25,000 in virtual funds to learn the platform and try out different trading strategies.
Nadex is not the buyer or seller but the facilitator of fair and transparent execution. It is regulated by the Commodity Futures Trading Commission or CFTC.
The firm ensures the safety of funds of members by holding these in segregated accounts in top U.S. banks.
In 2019, Nadex announced NadexGo™ – a Progressive Web App that works with your Nadex desktop platform, allowing you to make a trade on one device and monitor it on another. It features charts, drawing tools, and technical indicators.
Asset Classes/Tradable Securities from Nadex
- Commodities – Gold, Silver, Crude Oil, Copper, Natural Gas, Corn, Soyabean
- Currencies – EUR/USD, GBP/USD, USD/JPY, EUR/JPY, AUD/USD, USD/CAD, GBP/JPY, USD/CHF, EUR/GBP, AUD/JPY
- Stock indices – The Dow, the S&P 500, the Nasdaq-100, the Russell 2000, the FTSE China A50, the Nikkei, the FTSE-100, the DAX
- New for 2019! Touch Brackets – A contract that allows traders to speculate on a price movement in a predefined range that moves with the underlying market. Learn more here.
Binary options, which are different from traditional options, are a get-all or nothing kind of trade, where you pay attention to the direction of the movement of the underlying asset (through call or put option, depending on whether you think the asset will increase or decline in value). You commit on the amount you are willing to risk (called the strike price) and the time frame involved. In the end, you’ll either get a fixed return or stand to lose the investment.
Nadex also allows buying and selling spread contracts, or what they call Call Spreads, which have an upper pricing level called ceiling and lower level called the floor, thereby limiting your risks within the range.
Within the floor-to-ceiling range, spreads move when the market moves up or down, and so does the value of the spread. You can exit your trade anytime up to expiration, to lock in profits or limit losses.
Final Thoughts on Nadex
Nadex, as a regulated exchange, is the best avenue for trading in binary options. Alternatively, successful trades fetch you full profits. The exchange also provides a demo account to help clients learn the ropes of the trade.
Note: Third party services such as trade signal providers and third party technology providers to assist trading at Nadex may require registration with either the Commodity Futures Trading Commission (CFTC) and/or the Securities and Exchange Commission (SEC). For instance, a signal provider who provides advice (i.e. the trade signal) either directly to the trader or through a publication, and is compensated for such advice is acting as a CTA and should register with the CFTC as a CTA unless it qualifies for an exemption.