Nadex is an American exchange that offers powerful trading tools and advanced features to traders of all experience levels. Nadex is not a broker but a CFTC regulated exchange.

 

 

Nadex focuses on trading binary options and spreading calls across the most popular commodities, forex and stock index futures markets. This review of Nadex will evaluate all elements of their offering, including pricing, accounts and trading platforms – including NadexGo, the new mobile platform, before concluding with a final verdict.

A brief history

Before looking at the potential for daily returns, it helps to understand how Nadex has evolved into the leading exchange of its kind. The exchange was launched in 2004 and was originally called ‘HedgeStreet’. The goal at that time was to create an electronic market that facilitates the trading of financial derivatives to retail investors. However, by 2007, HedgeStreet had closed its doors.

IG Group Holdings Plc. bought the company and in 2009 HedgeStreet was relisted on the North American Derivatives Exchange (Nadex). With sophisticated new technology and instruments.

It is worth emphasizing that although the parent company is based in London and is listed on the FTSE 250, Nadex is headquartered in Chicago, Illinois.

Products

Part of the improved product line was a wider choice for binary options. In fact, their binary and call spread contracts cover a variety of underlying markets, including futures, futures index futures and spot forex rates. Furthermore, Nadex members may take positions on all of the following assets on:

  • Stock Futures – US 500 (S&P 500), Wall Street 30 (DOW), US Tech 100 (Nasdaq), US SmallCap 2000 (Russell 2000), FTSE 100, Germany 30 (DAX), Japan 225 ( Nikkei ), China 50
  • Forex pairs – EUR / USD, USD / JPY, GBP / USD, USD / CHF, AUD / USD, EUR / GBP, USD / CAD, AUD / JPY, GBP / JPY, EUR / JPY
  • Commodities – crude oil, gold, silver, copper, natural gas, soybeans, wheat

Traders can also take advantage of a choice of expiration dates, including intraday, daily and weekly expiration. But using Nadex means that you can start trading with only five-minute forex or 20-minute stock index, but their product line does not include 60-second binaries or similar products, as some competitors do.

Nadex regularly adds new products, and Touch Bracket ™ contracts are one such addition. The Touch Bracket ™ is a contract that allows the trader to speculate on the price movement of a market within a predetermined range. The range is limited by the floor and ceiling prices. Within these levels, the value of the contract will move in line with the movement of the underlying market.

The micro-lot sizes of the new Touch Bracket ™ contracts offer options for trading with low capital requirements. With the built-in floor and ceiling structure, whether tall or short, the contracts provide a clear risk control. No sliding and no nasty shocks. This provides the leverage, but also has a managed risk. The maximum capital risk for any trade is the only capital required to secure the trade. Once the trade is open, the capital requirements never change, even if held overnight, making these contracts as easy to trade as day trading.

Minimum initial deposit

Nadex welcomes traders by only requiring a minimum initial deposit of $250. That’s actually only half the industry average. In fact, Nadex has taken steps to ensure that once you fund your account, you can immediately start trading a variety of markets in binary and spreads.

This low initial deposit is particularly attractive to beginners who may not want to risk too much capital.

An even more powerful aspect of risk protection is the limited risk. The most you can lose on binary options is the amount you paid to enter the trade, as the value of the binary cannot drop below zero. Since you can never risk more in your account than you have, your losses cannot exceed deposits.

Distributions and commissions

Most brokers do not offer real exchange trading. Since Nadex is an exchange and not a broker, traders can submit their orders directly to the exchange and not through a broker. Therefore, Nadex members also do not have to pay any brokerage commissions.

Instead, Nadex charges a flat fee of $1 per side per contract. If a binary options trade expires worthless, Nadex will waive the settlement costs. These trading and settlement costs are Nadex’s only source of income. This means that they do not trade against their traders. Some people believe that this can mean attractive earning potential as your trading costs are lower. Regarding the payouts, the maximum losses and profits are calculated by means of entry / exit times, as well as the contract type.

Payouts can exceed 100%, while losses are limited to the amount initially invested. Because you cannot take trades if you do not already have the necessary amount in your account, losses cannot exceed deposits.Since Nadex does not participate in the trading, the bid/ask spread in individual markets, as well as the price setting, is determined only by the participants and buyers and sellers. That said, as a CFTC regulated exchange, Nadex works in partnership with various market makers to ensure viable liquidity and bid/ask spreads.

Nadex Call Spreads

Nadex also offers a unique product which they also call ‘Call spreads’. It is offered on a number of markets, including futures index for stocks, commodities and forex. But do not be afraid; it is also simple to understand this distribution.

You can trade the price of a market like EUR/USD within a range. If the price of EUR/USD fluctuates, so does the spread, although it remains within a predetermined upper and lower limit.

It is worth emphasizing that if the value of EUR / USD exceeds one of the limits, the spread value of EUR / USD will stop, regardless of the limit that it violates.

At the upper limit, the distribution stops at a maximum value. At the lower bound, the spread reaches a minimum and loses no more value, regardless of how far the underlying market falls.

As a result, you gain better control over your risk-reward ratio. This is because you determine your risk parameters via the call spread limits.

You have spread intraday and daily calls. Each requires a careful distribution strategy. This is hopefully where the Nadex trading platform comes into play. Details on this can be found further on.

Hopefully now you know what a Nadex spread is. However, go to the official website for a more detailed breakdown of forex and binary spreads. You will also find contract specifications.

Leverage

The advantage of Nadex distribution in terms of leverage should also be explained. Usually forex traders in the USA cannot get better than 50:1 for example. Nadex spreads are fully collateralized and do not involve margin. It is not a leveraged product but more like a short term option. However, in many cases the cost of a Nadex spread can be lower than trading the underlying market directly.

This low cost can effectively give you high reward and risk. You also have a certain amount of risk control, as your maximum risk is limited. Additionally, you can exit early to further limit your losses. Alternatively, you can take your profit before the spread expires.

Other Trading Festival

The reviews of Nadex were quick to say that their pricing structure is quite transparent. As a result, traders do not have to worry about a series of hidden fees that will cut into the end-of-day capital. Having said that, there is a refundable fee of $25. If you need to pay any other fees, you will experience clear notifications.

So is Nadex a good exchange in terms of fees? If used carefully, trading Nadex can mean generous leverage and low trading fees, all while keeping risk levels low. However, as is the nature of day trading, your capital is always at risk.

Unfortunately, user reviews are quick to point out that Nadex often falls short in terms of account promotions and special offers compared to other binary providers. However, sometimes they have free trading days and other similar offers. You should check their official website for any current information on this.

 

 

Nadex trading platform

The platform is one of the most important components of the merchant experience. This is where you will spend most of your time, conducting market research and executing trades.

The results of Nadex’s own platform assessments are mixed. Although you have everything you need, from technical indicators to free real-time market data feeds, the platform feels somewhat foreign. Hence, new traders may want to use the platform first.

How to trade

On the plus side, setting up on the platform is relatively straightforward. Simply go to the ‘Finder’ window on the left side of the platform to select an asset. This creates a clean selection of the time frames for expiration.

Note that all times are listed in Eastern Time (ET).

Once both the asset and the expiration are selected, your ‘Markets’ window will update. After that, the price levels you can trade are with. Normally you can expect to have about ten levels to choose from.

Binary options from Nadex range from 0 to 100. The former is when the settled option did not finish in the money, while the latter reflects an outcome that did occur. Your trading card will then confirm:

  • Expiration Time
  • Price level
  • Size of the bid
  • Current bid and offer prices

You must then select buy or sell and specify a trade size. You also have the option to change the indicative price above or below the current levels to see if your position ‘matches’. As a regulated exchange, Nadex will never take the other side of your trade. Your order will only be matched by another merchant.

Of course, you can close your trades at any time. This will allow you to realize profits or reduce losses. Finally, the numbers your ticket displays highlight the outcomes if you let the option expire.

Then you just need to hit ‘Place order’. If it matches, you should be able to see your trade in the open position window. However, if it only partially matches, it is automatically moved to the assignment screen. You will then receive an email confirmation with the details of your trade and another when an order is completed.

Platform statement

As the customer reviews of forex and binary options explain, the platform is quite user-friendly, which even beginners can understand how to trade comfortably. Access to historical data is provided, as are all the necessary symbols and tools to interpret price action.

Mobile Apps

The mobile app reviews quickly show that Nadex’s new Progressive Web App offering called NadexGo is one of the most comprehensive on the market.

Once you finish downloading NadexGo, you will appreciate its elegant user interface and concise design. In fact, the trading star series for tickets looks a lot like the table platform.

Research is simple while setting up alerts is quick and hassle-free. You also get access to the same free signals, while keeping your order history simple. Additionally, you can use binary options app tutorials to help you utilize your Apple or Android app.

Overall, the mobile apps provide a smooth transition from the desktop-based platform. Furthermore, NadexGo is actually supported by a browser-based interface that you can open from your mobile device. All of this will help alleviate the concerns among traders who worry that they cannot effectively implement the 20 minute or hour strategy.

Methods of payment

Once you’ve signed up, you’ll need to fund your account. Fortunately, Nadex offers a number of ways you can use deposits and withdrawals, including:

  • Debit card
  • Electronic remittance
  • ACH transfer (US residents only)
  • Paper check (US residents only)

Note that bank verification is required for some transactions and credit cards are not accepted. Users may have to pay withdrawal fees if they use bank transfers, which will cost $25 but are normally processed the same business day. ACH transfers are free, but usually take between three to five days.

You can go to your account section to select a specific payment amount. Also check their FAQ page for details on minimum withdrawal limits, proofs and any other issues as this depends on the payment method and may change over time.

While these payment methods are fairly industry standard, some user reviews have complained about the lack of an option to fund an account or take profits via PayPal.

Nadex accounts

Opening a Nadex account is relatively simple. There are only two account types to choose from, a US individual account and an international individual account available to residents of over 40 other countries. Visit the account types page on the Nadex website for a complete list of countries.

You just need to go online and follow the instructions on the screen. You must provide the following:

  • Date of Birth
  • Permanent residential address
  • Social Security Number or national identification number

Note that you may need to upload supporting documents before you can start trading. You must also fund your account. When you sign up, you will also receive information on how to close your account.

Demo account

Nadex offers a free practice account. Once you have the demo login details, you can use the same platform and real-time data as those with live trading accounts. Signing up for a demo account is the ideal way to practice generating profits without having to risk real capital. You can practice scalping strategies, intraday strategies or any other.

 

 

It is also worth noting that there are certain differences between demo and live trading. For example, a practice account cannot replicate the psychological pressure that comes with generating real capital. If your demo account is not working, you can contact customer support. You can also see the Learning Center for guidance on how to get the most out of the trading platform.

Additional features

Reviews of Nadex praise the extensive resources available. This can help you understand how it works on Nadex. Some tools can also help you earn income and achieve your personal success, including:

  • Advanced Charting – Sophisticated charts and technical tools can be used to develop a range of techniques, including a cash out strategy (ATM). For example, you can also use candlestick charts, Fibonacci retracements and the MACD indicator to help you set up a binary options strategy with a favorable risk-reward ratio.
  • Nadex spreads – These are similar to binary options in that they have a maximum possible profit and loss. However, they have a variable payout at expiration instead of the all-or-nothing outcome of binaries.
  • APIs – There is a lot of information online about how to use APIs to rest and debug, including the unofficial Nadex python API and documentation.
  • Data market – Nadex offers real-time indicator price data that closely matches the price of the underlying market. There is no delay. Nadex does not charge any extra fee for data feed.
  • News Trading – Some use complex patterns and trading journals to make and improve, for example, a binary stranglehold. However, some traders focus on market news and luckily Nadex provides daily commentary and video on important market events. This content is created exclusively for Nadex by a group of experienced and trusted analysts with a variety of trading backgrounds.
  • Education – From weekly webinars to e-books and trading courses – there is a wealth of information to help your trading grow in Nadex’s Learning Center. Additionally, you can also go online to find forex options videos and strategies to trade indexed stocks in a volatile market environment.

Regulation and License

Because of hacks and promises of brokers to make traders millionaires, it is important to choose a place to trade binary options that is regulated. Is Nadex a Scam? Users can relax knowing that Nadex is legal and regulated by the US Commodity Futures Trading Commission (CFTC). You can see their official website for verification.

This regulation should also make traders outside the US comfortable. Whether you’re in the US or one of the more than 40 other eligible countries, whether it’s Mexico, Japan or the UK, Nadex aims to treat all consumers fairly.

Advantages

There are a number of distinct advantages to choosing Nadex, including:

  • Management – managing market orders and quotes is quick and easy on the Nadex system.
  • Customer Service – User reviews report high satisfaction with the extensive customer service offered.
  • Market makers – Nadex has attracted market makers, which can lead to increased liquidity for more and larger traders.
  • Fees Structure – If you take Nadex vs IQ Option and Cboe, you realize that Nadex offers a competitive, transparent pricing structure.
  • Demo Account – Opening a free demo account is simple and can be an effective way to understand Nadex while gaining valuable trading experience.
  • Accessibility – Nadex welcomes traders from over 40 countries. This means that Nadex is a viable option for UK residents, as well as those from the US, Canada, Europe, Asia, Australia and beyond.
  • Regulation – Nadex is regulated by the US CFTC to ensure that the capital of the trader is protected in a number of scenarios. Furthermore, Nadex will have to adhere to rules and regulations specifically designed to protect consumers.
  • Training – Nadex offers tutorials, user guides, PDFs, eBooks, webinars, and a number of other helpful resources through their Learning Center. This is a fantastic place to go for aspiring traders who need help developing winning strategies. In fact, their webinars can provide particularly detailed guidance on short-term trading, scaling with five-minute binaries, as well as details on making an effective ATM or hedging strategy. Not to mention that there is a wealth of information available on trading tips and strategies.
  • Tag brackets – the power of leverage, but with a limited downside Micro lots make them ultra flexible.

 

Disadvantages

Despite advantages, user reviews also expose some disadvantages to the Nadex offering, including:

  • Instrument list – compared to binary brokers, such as Oanda and Stockpair, Nadex does not offer such an extensive range of products. For example, they do not offer monthly binaries with one touch.
  • Promotions and bonuses – Nadex has the error in the reviews and ratings of options because she does not offer special offers and new customer bonuses.
  • Difficulty – Although Nadex is beginner friendly in a number of ways, some users may find their binary options trading more complicated than other binary options providers.
  • Order Types – Some competitors offer more order types and therefore have a greater choice for intraday traders.

Nadex Trading Hours

Nadex trading hours will be the same as the asset you are trading. This includes both regular and electronic trading hours. From Sunday evening until the close of markets on Friday, US Eastern Time, Nadex offers trading 23 hours a day, with an hour from 5:00 PM to 6:00 PM for exchange maintenance. If a particular market is closed due to a holiday, Nadex will stop trading the market during the holiday period.

Contact and customer service

Nadex exchange reviews are quick to praise the customer service component of their offering. If you have any problems, you can contact us by email or phone. Customer service representatives are reliable and knowledgeable. They can help you if the site is down and point you to any legal rules and necessary extensions.

They may also be able to explain why an order was cancelled. Additionally, reviews show that agents had a strong technical understanding of the platform and tools.

Simply go to the home page and then ‘Contact Us’ for the contact number in your location. Note that customer support assistants are available by email or phone between 3:00 PM ET on Sunday and 4:30 PM ET on Friday. Due to exchange accounting and other requirements, agents are available 24 hours a day from Sunday at 3 a.m. to Friday at 4:30 a.m. ET.

On the downside, Nadex does not currently offer live chat support, although it plans to do so at some point in the future. This is a drawback that is pointed out in both customer reviews and investment forums.

This means novice traders who want direct access to customer support may want to look elsewhere. That’s a shame because competitors are ramping up their customer service offerings even further, with some even facilitating live video chat.

Note that customer service agents cannot advise you on income and taxes, including any form of capital gains calculations and reporting.

Safety and Security

As accounts are no longer uncommon, some traders are understandably concerned about security. Fortunately, Nadex has made it relatively easy to keep your capital safe. Segregated accounts with banks in the top tier keep all deposits by the customer safe. The Nadex Group also states that they use intelligent encryption technologies to keep all trading activities and personal information safe.

Nadex verdict

Nadex is a wise choice for traders looking to trade binary options over different timeframes with powerful trading tools. Their offering also comes with a demo account, competitive pricing and an extensive learning center.

Nadex does come with certain disadvantages. First, some competitors offer a more extensive product list. Second, Nadex can offer more in terms of welcome bonuses and promotions.

Overall, is Nadex a good choice for binary options traders and does it compare favorably to binary options brokers? Yes, the US based, regulated exchange (not broker) is able to meet and exceed the needs of beginners and veteran traders alike. But rule 101, you must develop effective options strategies. Failure to do so could result in you effectively gambling and risking losing your balance. However, due to the limited risk guarantee of Nadex, you cannot lose more than your deposit.

Accepted countries

Nadex only accepts traders from the United States.