Nadex Review – Binary Option Trading
When John Nafeh founded Nadex in San Mateo in California in 2004 the company was originally named HedgeStreet. HedgeStreet was the very first internet-based marketplace for event futures and derivatives exchange in the United States being regulated by the CFTC (Commodity Futures Trading Commission).
It operated the HedgeStreet exchange meeting the growing need to provide private investors with a place to respond quickly to price movements and to economic events.
According to the growing number of private investments in stocks the company's business model was focused on small investors from the beginning.
At that time, John Nafeh created and used the term “hedgelet” to explain the main line of the company's business. This business was shut down in 2007.
The IG Group from the U.K. purchased HedgeStreet in 2007, restructured its technology, products and exchange and started also to offer binary options similar to those on IG's own platform.
The main reason for the IG Group's decision was the fact that, according to the laws and rules of the United States, foreign brokers are not allowed to operate within the U.S.
In 2009, the company's name was changed to Nadex, short for Northern American Derivatives Exchange.
So, today the IG Group owns Nadex and the headquarters of the company are situated in Chicago.
By now, U.S.-based Nadex is the first and biggest web-based and retail focused binary options exchange covering a wide range of markets with daily and weekly intraday expiration.
Beside its main service offering retail trading of binary options, Nadex offers forex rates to economic indicators, commodity futures, equity index futures, economic events and stock indices.
Nadex gained a very good reputation predominantly for its fair and low, transparent trading costs without hidden charges, and for the funds being secure in the most trustworthy U.S. banks without involvement of offshore banks.
Nadex enables individual investors to trade multiple markets from their one single account on one single trading platform on their desktop or via all kinds of mobile devices.
The trades are not limited to one single market and investors have the free choice of all opportunities. For even more safety, here the traders operate with guaranteed limited risks and without any broker commissions, as Nadex is not a buyer or a seller.
It just assures transparent and fair executions.
The crucial advantage is the fact that Nadex is completely legal and regulated for U.S. residents. As a CFTC-regulated U.S. exchange, Nadex operates only in the U.S. and members‘ funds are safe in separated accounts in reputable U.S. banks.
What are Binary Options?
Binary options may sound complicated initially, but binary trading makes it amazingly easy to trade most of the stock indexes, commodities and forex with a guaranteed limited risk.
Traders watch the market's price developments to answer a simple question with “yes” or “no”, as in answering the question whether the price of a market will be above a certain price at a certain time.
If the trader answers with “yes”, he will buy the binary option, if “no”, he will sell.
The price range to buy or to sell moves between $0 and $100. The price the investor pays is his maximum risk as there is nothing else to lose beyond this amount. If the trader holds the chosen option to the expiration and answered the question correctly, he will get the full amount subtracting the purchase price he paid.
To minimize the risk even more, Nadex offers the investors the opportunity to exit before the expiration to keep the profits they already gained or to cut their losses. A rather simple way of investing.
What makes Nadex a good choice?
There are some crucial factors to distinguish Nadex from similar providers on the market and it is highly recommendable to consider those:
The Nadex Trading Platform
The fast and powerful web-based trading platform of Nadex is easy to handle, with free access, helpful free real-time data information, drawing tools, full-featured charts and technical indicators.
Investors have the opportunity to place their orders themselves without a broker being involved while benefiting from the MOP (Market Order with Protection) that Nadex offers.
Members can use the platform with their laptop or computer with a fast internet connection in versions for Windows, Linux or Mac, or with mobile apps for their iPhones, iPads or Android. By simply signing in to the personal account, it is easy to open a trade on any one of the devices and to finish it on another.
Before making well informed decisions, users have the opportunity to analyze the market of their choice with the help of highly advanced real-time price data and the so-called price ladder that investors won't find anywhere else.
Scanning the market, executing orders and checking trades is possible from one single screen.
In addition to this, the traders can use all kinds of technical indicators, make notes to all features and charts and open and fund their accounts.
And there is one more special and important advantage. All interested traders have the chance first to open a free demo account with $25,000 in virtual money to get used to the platform and to find out if it really meets their needs.
Nadex even encourages them to test the binary options and spread trading for free before opening a live account with real money. And members may keep their demo account even after opening a real account.
One account for different markets
For U.S. citizens as well as international members using Nadex means that they legally trade a wide range of markets with the safety of the first exchange being regulated by the CFTC, and that they benefit from a defined, limited risk, the low opening balance and fair, competitive trading fees – all this from one single account.
They simply have to fund their account with a debit card and can start trading stock index futures, economic events, forex and commodities immediately.
From a single account traders operate:
Nadex – Trading fees
Every interested investor has the opportunity to open a free online account easily.
Using highly advanced trading software, up-to-date market data and powerful tools for charting and for analysis is also free for everyone with a live account at Nadex.
Trading may start immediately after funding the low minimum opening balance of only $250.
Users pay $1 per contract to enter and $1 to exit for the first 50 contracts while there is no exit fee when an option expires. From the 51st contract on there are no additional fees.
Besides, there is a special bonus offer for those who deposit $500 or more before their first trade. After their first trade they receive a so-called introductory fee holiday waiving the fees for the first days of their trading. The larger the deposit, the longer one may trade for free.
Nadex believes that only well educated traders will be successful. For this reason Nadex offers free trading courses for everyone.
For example, every member can download free trading handbooks containing all kinds of helpful advice – from basic knowledge for beginners to advanced guidebooks for professional investors.
Free education resources for all members that Nadex offers includes:
Moreover there is a free alphabetical glossary on the website explaining all of the traders' terminology and new free videos on Nadex' YouTube channel in every week.
With these free education options Nadex tries to help traders to find their own way.
Registration and Regulation
As already mentioned, Nadex is completely legal and fully regulated for U.S. residents. This CFTC-regulated exchange operates according to the U.S. laws, following the rules of the CFTC and cooperating with the top banks within the U.S. to deposit users' funds in segregated accounts.
On the website, interested traders may read the complete rules and all legal terms and conditions of the platform. And the management is introduced in person.
For further questions one may contact the customer service by e-mail or by phone, the support service being available from Sunday to Friday.
Top 9 advantages of Nadex
Nadex being a CFTC-regulated U.S. exchange that only operates within the U.S. and guarantees that members’ funds are safe in separated accounts in reputable U.S. banks.
Free trading accounts including free use of the software, up-to-date market data and powerful tools for charting and for analysis.
Low minimum opening balance of only $250.
Fair, low and transparent trading costs without hidden charges and a defined, reduced risk.
One user account for many different markets.
Nadex being an exchange means they don’t take commissions.
Many helpful free educational resources for beginners and for professionals, most of these available even before signing up.
Free demo Nadex account for beginners to test the platform with virtual money before deciding about a membership.
Full access to the accounts via computer, laptop, smartphone or tablet from anywhere and at any time.
Nadex – a personal conclusion
Nadex has been in business since 2004. After the restructuration in 2007 the platform added to their well deserved reputation. As a CFTC-regulated U.S. exchange that only operates within the United States, Nadex ensures that members’ funds are safe in accounts in some of the top U.S. banks.
The trustworthyness of Nadex derives from their not taking part in trades.
The free binary options demo account with virtual money is a perfect starting point for beginners and professionals to find out if the platform meets their requirements.
The platform is user-friendly, allows access via computer and all kinds of mobile devices and offers many powerful tools for a well informed analysis of the market before starting to trade.
Compared with other binary options brokers in the United States and with other binary options brokers reviews, the many helpful free education options for beginners as well as for professional investors are a significant advantage.
It makes a positive impact that Nadex doesn't try to make additional money with education, based on the company's philosophy that only well educated traders will be successful, and that the company's success depends on the success of the members.
Another major advantage is that users have the opportunity to trade so many different markets from one single account.
Of course there is no guaranteed risk-free trading or assured riches to be made overnight, but as a tested and proven starting point for investing and trading, with realistic aims and with a defined and reduced risk, in my opinion Nadex is a promising choice.
This is based on their offer of a free account with free powerful trading tools and low, competitive and transparent trading fees without hidden charges.
For investors searching for the best binary option broker within the U.S., Nadex is definitely in the game. As we have seen, there are many good reasons why Nadex is among the market leaders in the market. One can recommend taking a look at their website and checking them out at https://www.nadex.com/
Binary Options – High Risk Involved!
Investors should be aware of the fact that binary options are among the riskiest ways of trading. Unlike stocks, binary options themselves have no inherent value and usually, they cannot be held over a long period of time. However, when comparing the many binary options brokers in the market, Nadex is one of the best regulated.
The opportunities for trading binary options are strongly restricted in the United States. Because of its safe regulations within the U.S., Nadex is one of the most appropriate brokers for U.S. American investors. Still, for every investor it is highly recommended to use the free demo account to learn the ropes for trading binary options.
Using the demo account makes it much easier for investors to determine if this type of highly speculative trading really corresponds with their personal risk profile.
And here are the pros and cons all at one glance