Nadex Review

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Top Binary Options Broker 2020!
    Best Choice For Beginners and Middle-Leveled Traders!
    Free Demo Account!
    Free Trading Education!
    Big Sign-Up Bonus!

  • Binomo
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    Trustful Broker. Recommended Only For Experienced Traders!

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Nadex Review – The Binary Options Broker With 125,000 Clients

Posted by Dave | Jun 25, 2020 | Broker Reviews | 2

Nadex Review
  • Commissions and Fees

Summary

With so many trading platforms out there it’s hard to know which to choose. Nadex.com is a unique trading platform with many features for binary options traders. Read our in-depth review to decide if Nadex is the trading tool for you.

About Nadex

Nadex.com (North American Derivatives Exchange) is a regulated U.S. binary options trading exchange platform. It provides direct access trading to binary options, Touch Brackets™ and call spreads for currencies, commodities, and equity index futures. The U.S. Commodity Futures Trading Commission (CFTC) regulates the exchange which ensures the integrity of the marketplace and operations. They match buyers and sellers and do not take positions. This is important as there are a lot of questionable binary options brokers that operate like virtual online casinos with rigged decks (IE: trading against customer orders, delayed fills and withdrawal issues). Nadex provides both online and mobile platforms to make direct access trades without outside brokers. Nadex is owned and operated by IG Group (LON: IGG), a FTSE 250 financial firm.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Top Binary Options Broker 2020!
    Best Choice For Beginners and Middle-Leveled Traders!
    Free Demo Account!
    Free Trading Education!
    Big Sign-Up Bonus!

  • Binomo
    Binomo

    Trustful Broker. Recommended Only For Experienced Traders!

The exchange is open 23 hours during the weekdays (Monday through Friday) from 6pm EST to 5pm EST the following day. On Friday, Nadex closes at 5pm EST and re-opens for trading at 6pm EST the following Sunday.

Nadex Commissions and Fees

Nadex charges a $1 fee per contract when opening a position and charges $1 per contract when closing a position.

There are no software fees and free demo account is available just for registering.

Nadex.com Funding

There is a $250 minimum deposit to open a live trading account. There are no account minimums or inactivity fees once a live trading account is open. Any additional funding has a minimum $100 amount which can be funded immediately with a U.S. debit card. ACH transfers may take three to five business days. Wire transfers are available for deposits and withdrawals.

Nadex Platform Features and Tools

The Nadex trading platform can be accessed through the web or through the mobile app available for Android and iOS. There is no stand-alone desktop download. One thing to keep in mind, you cannot have the live account platform running simultaneously on the web and on mobile together. If you open the platform on the mobile app, it will turn off the web access and vice-versa. This is common on most trading platforms for security reasons. If you need quotes or charts while away from desktop temporarily, you can access the demo-mode on the mobile without having the access cut to live account on your desktop.

Margin/Leverage

While Nadex allows for short-selling, there is no margin accounts or leverage available for trading. This is probably a good thing considering the risky nature of binary options.

Research Tools

Nadex doesn’t provide fundamental research tools on the platform, however, the technical analysis tools are centered around the charts. Nadex also provides access to educational materials like free webinars and courses.

Charts

The HTML5 charting is exceptionally well designed. The incremental time selection is the deepest I’ve ever see, starting at 1-tick and 1-second charts up to monthly, including less popular four-hour charts. One thing to note is to make sure to select the Nadex Settlement Index for standalone charts. The Binary Ladder charts come with order entry levels on the chart. Some users may find it useful to place trades directly on the chart, but personally I find it takes up precious screen space, especially on the mobile version.

There are no news feeds on the platform. If traders want access to streaming market news, they will have to sign up for a standalone platform like Benzinga Pro.

Watch Lists

There are many selections of pre-configured watch lists starting with All Master Spreads, Expiring Soon to Popular Binaries to Recently Trade. The Popular Binaries and Expiring Soon watch lists are my favorites since they tend to have the most activity which then helps to ensure more liquidity. Spreads can get exceptionally wide when liquidity thins out. Unfortunately, Nadex doesn’t provide a time and sales or volume statistics to give any clues on the liquidity. The only clues are when spreads get split by retail traders which can sometimes be spotted by odd-lot bid/asks.

Users can create and customize their own watch lists or use the pre-set watch lists like the most active stocks or benchmark index stocks like the S&P 500 or Nasdaq 100. Instruments can be linked to charts so simple click on any symbol in a watch list can quickly update the chart along with all your indicators and studies.

Order Entry

The order entry windows are designed like level 2 screens with bid size and price on the left and Offer price and size on the right, followed by additional layers of bids and offer below. Each order entry window displays the Max loss and Max win dollar amount, which is based on Order Limit price and Size (number of contracts). This helps traders to quantitatively define the risk and reward values on each trade. Market orders are available, but can be dangerous in volatile markets as spreads are wide to begin with.

Types of Contracts

Nadex is an exchange for binary options traders. If you want to trade stocks or other types of assets, you will need to use a different brokerage account.

There are three different types of options on Nadex:

Binary options contracts have a set expiration and strike price that it must close above by at least a fraction. The payout total is $100 minus whatever was paid for the option. For example, if a trader bought a 20-minute binary option for US 500 (equivalent to the S&P 500 e-mini) Sept > 2781.00 for $13.00, then the underlying US 500 indicator needs to close above 2781.00 to be considered in-the-money (ITM) at the time of expiration. If the US 500 closes at 2781.5, then the payout is $100, but the trader should subtract the cost of the option ($13.00) to derive the actual profit of $87. Out-of-the-money (OTM) options are priced cheaper than in-the-money options (ITM).

Call Spread contracts enable traders to take a position with a defined Max Loss and Max Win based on the range of the spread. It’s important to pay attention to the Nadex Indicative Index (NII) value price. The different between the NII value and the bid/ask is the premium attached to the spread. For example, an NII at 2778 with a bid/ask of 2779.6 and 2780.1, means there is a 2.1 difference or 21 pips of premium if you take an entry at the 2780.1 offer or 16 pips of premium if you sell/short the bid at 2779.6. If the contract is OTM, then the premium will be more than if it was ITM. There it’s important to be aware of the spread premium versus the underlying NII before taking a trade. This is very important if your contracts are OTM when the spread expires since they will expire worthless.

Touch Brackets™ are one of the newest offerings from Nadex. Touch Brackets are contracts that can be used to trade forex markets and stock indices with fixed risk/reward. Brackets can be bought or sold so traders can play both sides of the market. These contracts can be confusing at first, so make sure to review Nadex’s explanation. Basically, each bracket has a ceiling (top of range) and a floor (bottom of range). There are 4 weekly bracket options with different floors/ceilings relative to the market price. Brackets expire a) at the end of every week or b) if the ceiling or floor price is hit.

For example, you may buy into a US500 bracket at 2780 with a floor at 2770 and a ceiling at 2820. If the US500 hits 2770, you will automatically be stopped out for a loss (thus, the fixed risk). If the US500 hits 2820, you will automatically take profits (fixed reward). If the contract expires before the floor or ceiling is touched, your profit/loss will be equal to the difference between the market price and the floor or ceiling. For example, if the US500 closed at 2800 at the time the contract expired, you would make a profit of 20 points (2800 closing price – 2780 entry).

Note: Traders should be aware of the risks involved with trading binary options. While Nadex is a reputable company in the space, the options themselves are highly risky due to their “all-or-nothing” structure.

Nadex Customer Service

Nadex offers customer service via e-mail and phone support. Phone support is available from 3:00pm EST Sunday through 5:00pm EST Friday. Once an account is set-up, it’s a good idea to use an alternative e-mail address to receive trade e-mails. Nadex sends an e-mail for every single order transaction, even orders that don’t fill as well as adjusted orders, expired orders and cancelled orders. This applies to orders on both demo and live platforms. The order confirmation e-mails can easily overload your inbox quickly.

Can You Trust Nadex?

The binary options industry doesn’t have the most stellar reputation. FINRA has already brought cases against a few binary options brokers and continues to warn investors of the risk involved with trading these financial instruments.

Due to the nature of binary options contracts, these financial instruments can be attractive to gamblers, and many scams have been brought down for using “get rich quick” marketing messages.

To remain fair in our review, we need to treat all of the players in the industry as individual companies. A shady industry isn’t necessarily indicative of a shady company, and Nadex is by far the most reputable company in the space. Nadex is owned and operated by the IG Group, a multi-billion dollar company based out of London. The company is transparent and avoids overly aggressive marketing.

Binary options are inherently risky, but Nadex appears to be a trustworthy exchange if you choose to trade these contracts.

What Type of Trader Is Nadex Best Suited For?

Nadex is ideal for intra-day traders with small accounts that have a seasoned understanding of the underlying trading instruments and a methodology to trade them. While there are weekly binaries available, most of the contracts expire intra-day. The platform has a shallow learning curve and registering with the site enables the free demo account, which is almost identical to the live platform. New users should spend time on the demo before even considering making a live trade to get acclimated to the rhythm of the quote movements.

Nadex

Broker Name: Nadex
Platform: BO, Call Spreads, Touch Brackets
Founded: 2009
Bonus: CFTC Regulated
Return/Refund: Varies
No. Of Assets: 29
Regulated: CFTC
Demo Account: Yes
Minimum Deposit: 250
US Traders: Accepted

Nadex Review

Nadex (North American Derivatives Exchange) is a US-based, retail-focused, CFTC regulated exchange that offers binary options, call spreads and Touch Brackets, making it our top choice for US traders. Nadex is owned by IG Group, a prominent international provider for CFD trading, Spread Betting and Share Dealing. The company headquarters are based in Chicago, Illinois and subject to US law. Nadex’s legal information is completely transparent and easily available on their website.

Is Nadex A Scam?

Nadex is a US exchange regulated by the Commodity Futures Trading Commission (CFTC). Nadex is NOT a scam, but the real thing. For further reference, see the CFTC Fraud Advisory announcements on Binary Options.

Editor’s Note – Why Nadex DOESN’T Suck in 50 Words

Nadex is one of only a few legally operating, CFTC designated, binary options exchanges based in the US (Cantor Exchange is another worth mentioning). This means a number of things for both US-based and international traders (Nadex accepts accounts from various countries around the world). First and foremost, it means CFTC oversight, secure withdrawals and access to all the top assets you have come to know and love.

Why Nadex Might Suck

You might not like Nadex because it is not the same as the trading you remember from old off-shore binary options brokers. Nadex is not based on spot prices and you are not trading against the house, which means market pressures affect your trading, and binary options are listed with fixed strike prices.

Should I Open an Account with Nadex?

Although trading with Nadex is much different than European style binary options, the idea is the same. Nadex offers several types of trading instruments – binary options, call spreads and Touch Brackets:

Nadex Binary Options are financial instruments that turn every trade into a simple question: will this market be above this price at this time? Binary options are based on the 0-100 model and are bought and sold in lots. This means if a trade expires OTM, it is worth nothing. If a trade closes ITM, it is worth $100. Please note that your profit or loss is reflective of what you paid to place the trade, including fees. You can click here for more on how to trade Nadex Binary Options.

Nadex Call Spreads are a single contract with a floor and a ceiling range. The floor represents the lowest level the contract can trade, and the ceiling represents the highest level a contract can trade. We think call spreads trade like spot Forex but have training wheels in the form of profit/loss limits, but it’s the binary return options that we are here for.

Nadex Touch Brackets enable you to make trades based on price action within a predefined price range. Each contract has a floor and a ceiling offering a natural price target with known risk and reward. Touch Brackets track the movement of the underlying market price. If the Nadex Underlying Indicative Index touches either the floor or the ceiling of the Touch Bracket, then the contract expires immediately. That way you know maximum profit targets and the maximum risk if your trade goes against you. And, you can always place an order to close a position prior to expiration.

The asset list at Nadex is pretty good. Not as large as others I have seen, but the good news is that it is growing all the time. There are currently 8 major indices, 10 Forex pairs, 7 commodities, 1 cryptocurrency, and 3 Economic Events contracts to choose from. Indices include the major US, European, Japanese and Chinese markets. All the major Forex pairs are represented, as well as commodities including gold, silver, copper, oil, natural gas, soybeans, and corn. The only cryptocurrency is Bitcoin.

You can trade quite a few markets in short-term five and twenty-minute binary options contracts. Expiry is where you might get a little confused but don’t worry, it’s not too difficult to understand. Each asset has a list of set expiry times which can range from 5 minutes to intra-day, to end of day and end of the week. You can hold your binary options until expiry and get your expected return, or you can sell it at any time beforehand that you choose. Nadex binary options are completely tradable, so long as there are willing buyers and sellers, which is similar but far more advanced than Early Out or Close Now features you find elsewhere.

Bitcoin Trading At Nadex

Nadex entered the cryptocurrency market with the addition of Bitcoin Call Spreads. So far they only have two Bitcoin contracts, one with a weekly and one with a monthly expiry, but we expect to see them add more as cryptocurrencies gain wider acceptance. The call spreads are a bit different than the standard binary option, but still, are very easy to trade. You can sell your position to lock in profits or cut losses at any time you want.

The name “spread” comes from the fact that there is an upper and lower limit to prices, that is the spread. The limits cap gains and losses, but profits are based on the amount of pip movement in the underlying asset.

Nadex Complaints

Nadex gets its share of complaints, but which exchange/broker doesn’t. The difference is that complaints here are from traders who aren’t allowed to join, traders who fail to understand the system and traders looking for more services. What you don’t find are complaints about scams, shady withdrawals or fraud. One common complaint I find is that there aren’t enough assets.

The number one complaint is that it’s not as easy as CySEC style options, but that doesn’t matter now as CySEC options aren’t the same as they used to be.

Nadex Bonus

Nadex does not offer any promotions or bonuses at this time. In the past, they have run some limited fee-free promotions.

Nadex Withdrawals

Nadex has fast withdrawals. They can be made by wire transfer or ACH transfer (US Only) to your bank account. All withdrawals are processed within one business day and returned to your account within 3-5 business days. If you funded via debit card, to make a withdrawal you will first have to send in bank account verification documents, including a bank statement with your name, account # and a transaction to Nadex shown. It’s a pain, but trust me, it’s worth it for fast, secure withdrawals and its meant to protect you.

Nadex Extra’s

Nadex extra’s includes Event Binaries, Call Spreads, and Touch Brackets. Also, their NadexGo app is a great platform to trade on.

Event binaries are options on economic events like the weekly jobless claims and monthly NFP numbers.

Call spreads are like binary options in that they have a max and minimum payout, but trade like forex with profit counted in pips while the asset price is within the “spread”. Other features include 100% tradability as in you can buy or sell whenever you want and are not limited to holding until expiration.

Nadex Touch Brackets are a combination of a spread and range option that trades just like a forex pair, except it is automatically expired if the upper or lower boundary is reached. Sounds just like the call spreads except with automatic expiry when the trade maxes out. The micro-lot sizes of Touch Brackets provide flexibility to trade with low capital requirements.

The Nadex mobile platform, NadexGo, is great. It is a Progressive Web App (PWA) that automatically updates itself in real time, so it is always functioning at its best. It includes charts, trading, and more. It’s fast, intuitive, and well-designed.

Nadex Ratings

User Friendliness – 15/20

This is not the most user-friendly platform you will find. First off, it is not that simple to join. When you get on the platform you will find navigation a little confusing, but once you get a grip on it you will have no trouble with using Nadex trading platform. And, if you are like me, you will like it a lot.

Number of Assets and Expiry – 18/20

Nadex doesn’t have too many assets, but it does have all the ones that matter most: 8 indices, 10 currency pairs, 7 commodities, and 1 cryptocurrency. Plus you can also find economic event contracts, which I find to be a lot of fun. Additionally, new assets are being added regularly as the market calls for them.

Commissions, Support And Effective Returns – 19/20

Nadex has another difference from other brokers/exchanges – it charges small fees… but they are really low compared to what CySEC-style brokers keep when you profit. Nadex charges a $1.00 per side, capped at $50.00 per side. If you hold the position until expiration and it closes OTM (zero), then you will not be charged a settlement fee. Support is really good, they have a full staff available to answer your questions and help get you started. Effective returns can be really good, too.

Deposit, Payment and Bonus – 19/20

Nadex is the best exchange for any traders to deposit with (they allow accounts from various countries all over the world). Payments are fast, usually made within a few days of your request, provided the funds are available within your account and there are no verification issues to tie up your account.

Broker Extra’s – 19/20

There really isn’t one thing specifically that is extra about this exchange, except for the whole thing. For one, it’s not a “broker”, it’s an exchange. It has a vested interest in providing safe and legitimate trading because it is in business to provide the platform, not to take the other side of your trades. For another, the freedom for you to buy or sell whenever you want makes them infinitely more flexible than any other binary broker on the market. Trading with Nadex allows you to potentially increase your profits while keeping your risk always under strict control.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Top Binary Options Broker 2020!
    Best Choice For Beginners and Middle-Leveled Traders!
    Free Demo Account!
    Free Trading Education!
    Big Sign-Up Bonus!

  • Binomo
    Binomo

    Trustful Broker. Recommended Only For Experienced Traders!

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